Banning craft beer

My old home province of Manitoba didn't quite make commercial brewing of craft beer illegal. But they might as well have. Bartley Kives delves into the morass of Manitoba liquor regulations. Keep in mind that many of these regulations are the kinds of things that New Zealand's neo-prohibitionists would support. Fortunately, things look set to ease up in Manitoba. A bit.

Here's Kives:

Right now, licence holders are not overly pleased. There are 12 different liquor-licence categories in the province, each with its own set of rules and annoyances.

For example, hotels may obtain a licence to sell alcohol in a "beverage room," but only if they also have a liquor licence for a "dining room," which must remain open when the beverage room is open. As well, hotels can only obtain a beverage-room licence if liquor authorities grant something called a hotel certificate, an official stamp of approval the Manitoba Hotel Association dislikes because it may apply to businesses that actually function as long-term rental-apartment blocks, as opposed to actual hotels where tourists and business travellers stay for a short period of time.

Restaurants, meanwhile, may also obtain a dining-room licence, but must ensure alcohol sales do not exceed 60 per cent of gross revenue. Restaurants may also obtain a "cocktail lounge" licence where customers do not have to purchase food, but the combined restaurant-lounge must still maintain the 40-60 food-to-alcohol ratio.

There's also a cabaret licence, which does not demand any food sales but does require licence holders to exhibit two hours of live entertainment every day. That entertainment must be visible from every room in the venue and must not involve recorded music.

As a result of these regulations, hotels that rent out space to pizza parlours in an effort to fulfil the dining-room requirement of their beverage-room licence have been hit with violations when the sole dining-room employee goes out to deliver a pizza.

Popular restaurants with lounges are forced to turn customers away simply to maintain food-to-alcohol ratios. And cabarets cannot satisfy the live-entertainment provisions of their licences by booking club DJs, many of whom are among the biggest draws in live music today. That's because of a literalistic interpretation of a cabaret-licence provision against recorded music, which was created to protect jobs for musicians in the age of jukeboxes.

It gets worse:

When cabaret owners offer to circulate a guitarist, accordion player or some other wandering minstrel around a level with no live stage, they are told those musicians must be miked up and broadcast, too.

"Even they say it's stupid," Kendrick said.

Hua, meanwhile, was forced to puzzle over which licence would best serve the Rec Room, his new Pembina Highway sports lounge, which will feature foosball, Ping-Pong and arcade games. "There's no licence for an entertainment hall that has Ping-Pong," he lamented.

And once you have a whole industry in place that has fixed investments based on a set of stupid regulations, it's harder to get rid of the regulations:

John Scoles, the proprietor of the Times Change(d) High & Lonesome Club, a Main Street roots-music venue, said he believes small venues will benefit the most from liquor-licensing reform.

"Small venues are the ones that struggle the most to meet licence requirements," said Scoles, who found the right formula for his own small venue in 2004 when he converted it into a private club from a restaurant and lounge.

"It never seemed success in this business was based on entrepreneurial ingenuity. It was based on what parameters you were forced to observe. Nobody could just have a great idea. They had to have a great idea that was shaped by something else."

But Manitoba isn't moving toward a free-for-all. For example, the new liquor-and-lotteries act will still require restaurants to maintain some form of food-to-alcohol sales ratio, Chomiak said.

There's a social benefit to serving meals with booze, he said. And more politically, the province isn't prepared to undermine entrepreneurs who've invested heavily in restaurant-lounge concepts such as Earls, Moxies and the Keg, which have proven extremely successful in recent years.

"We're not going to step all over people who've invested in infrastructure," said Chomiak, referring to independently owned restaurants as well as the chains.

Kives reports that there are zero brew pubs in Manitoba - population about 1.2 million.

Manitoba has a state monopoly on liquor sales: the Manitoba Liquor Control Commission. They keep prices fairly high. The province has a 0.05 drink driving limit.

And yet alcohol is a factor in over 40% of all traffic accident fatalities in Manitoba (2007 figures). In New Zealand, alcohol and drugs are implicated in about 30% of traffic accident fatalities. The total number of deaths will be higher, as we have roughly four times Manitoba's population and our roads are terrifying.

Note that percentages in the table below can add to more than one hundred as accidents can have multiple causes.

Table 26a from the same document shows about a ten percentage point drop in the fraction of accident fatalities involving alcohol from the late 1980s / early 90s to present. 

I hope that the local-level regulatory activity enabled under New Zealand's recent revisions to alcohol regulations do not wind up making parts of New Zealand look like my old home province.

Crash responsibility, and some back of the envelope reckoning

At the same time that I was trying to get stats on the number of drivers in the .05 to .08 range who had not been involved in accidents, Canterbury's Professor of Finance Glenn Boyle was getting annoyed with the New Zealand Herald's campaigning for a 0.05 limit.

The Herald published an article noting the number of accidents involving drivers just under the legal limit, along with the usual stuff from Alcohol Healthwatch:

Statistics obtained by the Herald on Sunday under the Official Information Act show in the last four years 20 people have been killed in road accidents involving drinking drivers just below the legal limit.

Another 281 people have been seriously injured in crashes where a drink-driver was also tested and found to be just under the limit.

Alcohol Healthwatch director Rebecca Williams said the statistics clearly showed 20 people would still be alive if the Government had responded to calls for a lower alcohol limit.

Glenn was a bit miffed at the Herald's credulity here. First, banning driving above 0.08 hasn't abolished accidents involving drivers who are over the legal limit - we still do arrest lots of people for driving after having had too much to drink. So it's a bit nuts to say that 20 people would be alive if the drink driving limit were at 0.05 over those four years. Some accidents would have happened even if the driver were sober, and some of them would have happened with the driver having continued to drink. It's pretty likely that the number of accidents would be lower, but it's pretty unlikely that each and every one of those accidents would have gone away. Maybe you could make the case for it if there were substantial decreases in driving in the >0.08 range with a drop in the limit to 0.05, but I've not seen evidence on that as yet.

Glenn got in touch with the reporter and noted that I was planning on heading out with the Christchurch police over the weekend; she called and asked me about it. She'd said that she'd call back on Monday to see how things went, so I was a bit surprised to see there'd been a piece on it this past Sunday.

I'll have to clarify a couple of points.

First, I do not doubt that there is increased risk of having an accident if you are between 0.05 and 0.08 relative to a baseline of zero. I would be pretty surprised if drivers in that range were not over-represented among those having accidents. But I do not know by how much they are over-represented. You are also at increased risk of dying in an accident if you are going 100 kph than if you are going 30 kph. But we do not set the speed limit to 30 kph: the reduction in accident risk isn't worth it relative to the delays we impose. So, for example, Forester et al 1984 concluded that the 55 MPH speed limit failed cost-benefit analysis unless we put next to no value on people's time. We also do not drive cars made of nerf to protect pedestrians.

Even if we only considered increased enforcement cost as the only cost, there would still be some cut-point below which the increased risk of accident among those in the .05 to .08 range wasn't worth lowering the legal limit.

If we think that those who choose to drive in the 0.05 to 0.08 range and who do not have accidents wind up having less fun than if they were required to be below 0.05, then that reduction in fun counts for something too - it's reduced consumer surplus. That doesn't mean that it's impossible to have a fun night out while you're the designated stone-sober driver. It just means that these drivers must wind up being worse off as they see it; otherwise, they would already have voluntarily chosen to have had less to drink. That moves the cut-point for increased accident risk upwards in just the same way that increases in the opportunity cost of time increase the optimal highway speed limit.

Unless we know how many drivers who do not cause harm would be inconvenienced by a reduction in the limit to 0.05 from 0.08, we have a hard time assessing the costs of that policy move.

Here's the Herald:

National Addiction Centre director Professor Doug Sellman is convinced there is a link. He said every time someone died in an alcohol-fuelled car crash, it was a chance to point out that former Transport Minister Stephen Joyce was partly responsible.

The Government has refused to move on a lower blood-alcohol limit for drivers until it receives the results of data from the Ministry of Transport and a driver-simulation study from Waikato University.

Sellman said Government "delay tactics" were costing lives. All the information was already available to make a decision, he said. "Joyce didn't act on the international research that was there already. None of the research says we need more research. Only Stephen Joyce believed that."

Sellman said the point of a lower limit was that it would reduce the number of drivers with higher alcohol levels, too.

The Herald on Sunday has been campaigning for a lower breath-alcohol limit, and statistics last weekend showed 20 people had been killed in the past four years in road accidents involving drinking drivers who were just under the current legal limit. But even that wasn't enough to force any response from the Government.

If all that we cared about was knowing that we reduced the risk of car accidents, you could push the button tomorrow for a zero drink-driving limit. You could also push the button for a 30 kph speed limit on the highway and nerf-cars. And you could blame the Transport Minister for every death involving drivers going faster than 30 kph. But reducing accident risk isn't the only thing that matters.

If we were stuck having to do it from existing data, I'd start here. Keall et al, 2004 provide some pretty decent NZ data.

At Table 5, the report estimates of the death rate per million trips for a few BAC intervals. Among those with no alcohol, the death rate per million trips is 0.2 for both males and females. For those in the .005-.055 range, they found no accidents for women and 0.4 deaths per million trips for men. For the .055 to .105 range, which spans the legal limit of 0.08, the death rate per million trips was 1.4 for women and 1.2 for men. At Table 2, the overall excess death rate per million trips is about 1 - Table 2 controls for time of night.

Now the value of a statistical life for policy purposes in New Zealand is $3.77 million.

The excess death rate per million car trips among those in the 0.055 to .105 range is 1.2 for women and 1 for men. So we'll average that at 1.1 and stick with Table 5 results. Every million car trips taken by drivers in the 0.055 to .105 range costs $4.147 million dollars in expected VSL losses. To the extent that this includes fatalities incurred by the driver, it massively overestimates social cost. But it also doesn't count any of the costs of non-fatal accidents. Because this study only looks at fatal crashes.

So if we only count fatality costs and count all of the fatality costs falling on the driver him or herself, then it would make sense to reduce the drink driving limit from .105 to .055 if drinkers would be no more than $4.15 worse off per trip as consequence. You may see a problem here: the current drink driving limit is 0.08, not 0.105, the risk of accident is strongly increasing in BAC, and this earlier data includes the very high drink driving accident rates among 15-19 year olds, who are now subject to a zero percent limit.

I do not know whether the raw data underlying the study has actual BAC or only the bucketed BAC categories. If the former, getting access to the raw data would let me back out the portion of increased risk in the 0.05 to 0.08 category and restrict things to the over-20 cohort. But it might just be worthwhile to have a look at what MoT is currently collecting, as they're looking also at non-fatal crashes.

So here's a question then. Let's suppose that the costs of non-fatal accidents are on par with the self-imposed fatality costs incurred by drinking drivers so the $4 is ballpark ok (but note the overestimate problems as it includes people in the 0.08 to 0.105 range). Do you expect that most people enjoying a night out would be willing to accept $4 to be subject to a 0.05 rather than a 0.08 limit? Don't tell me "Oh, I would, because I never have that much anyway." This question isn't for you. This question is for those who go out for the night and either worry that they've exceeded 0.05 or know that they're in the 0.05 to 0.08 range. As you walk into the bar someone offers you $4 and says "You can have this $4 if you can guarantee that you'll stay under 0.05 tonight." If most drinkers subject to the risk take the $4, and if the $4 is ballpark correct, then moving to 0.05 makes sense. If you'd have to offer them more than $4, then it's a value-destroying proposition.

Fun fact: you can back out how much net enjoyment people get from their last few drinks - the ones that push them into the 0.05 range - from what they spend on a drink combined with their price responsiveness. When drinks at the bar range from $5 upwards, it's going to be surprising if consumer surplus from last couple of drinks is less than $4 given demand is pretty price-inelastic. In other words, it seems pretty likely that people would turn down the $4 offer. And they'd be even more likely to turn down a lower offer - and I'd be pretty surprised if the non-fatal crash costs were higher than the proportion of fatality costs falling on the drink driver.

Finding the denominator

We simply cannot tell whether changing the drink driving limit to 0.05 from 0.08 is a good idea unless we have some idea what proportion of drivers on the road at different times of day are in that range. We can talk a lot about the numerator - how many people involved in accidents have had something to drink. But without the denominator, we cannot make sense of the numerator. 20 accidents could be a huge or a tiny proportion of drivers on the road who have similar blood alcohol readings.

Most likely, drivers in the 0.05 to 0.08 range would be over-represented in the accident stats after correcting for time-of-day and day-of-week effects. But that doesn't tell us whether reducing the drink driving limit would be a good idea. Rather, we have to weigh up the likely reduction in consumption in that range given a change in the law, and the likely consequent reductions in accidents in that range, against forgone consumer surplus among those who would have otherwise been driving in the 0.05-0.08 range without adverse incident. I don't know which way this would turn out, which always makes things more fun.

The New Zealand Police told me that it's impossible to have any automated gathering of that data - their machines are not set up to keep those running tallies. And it didn't look like anybody else was collecting the data. So I tagged along with an alcohol checkstop unit on Saturday night to scope out what would be needed for a survey - how many research assistants would need to tag along to have a decent chance of getting accurate data while still staying out of the way. Over about an hour on Victoria Street, 173 drivers returned no alcohol; 13 were in the 0-250 mcg range (under 0.05); 2 were in the 250-400 range (0.05-0.08); 2 were sent on for evidential readings as they seemed to be above 400 mcg. The officers noted it seemed to be a pretty quiet night - traffic was light and few drivers were in the 250-400 range as compared to other nights. And, surprisingly, one of the officers reported that she was sure that someone else had been collecting data of this sort.

I subsequently heard back from the right person at the Ministry of Transport that they have run a short survey assessing the proportion of drivers on the road in the various BAC ranges, or at least tallying the numbers registering 0, 0-250, and 250-400. And, even better, they've promised me the raw data mid-January. It's limited in that they were only looking at Friday and Saturday nights, but so long as I can sort out the proportion of accidents that happen at the same times, I can deal with it.

I'm very glad I'm not going to have to re-create the wheel on this one. The data collection looked like it wasn't going to be the easiest thing, and I was starting to have nightmares about just what the University administration paperwork was going to be needed to get permission to send RAs out with the Police, even were I to have found external funding.

Many thanks to the Officers who let me tag along for the night, the Canterbury Road Policing Manager, and Mike McCosker for getting me in touch with the right people to get things going. I think it's going to be pretty useful knowing how this data gets generated when I go to play with it in the early new year.

Drink-driving kids

The blood alcohol limit in New Zealand for those under 20 is 0%. For those over 20, it's 0.08.

It's worth keeping that in mind when you read stories giving the youth and adult arrest numbers:

The Group and traffic officers on Friday and Saturday had checkpoints around Tauranga, Mt Maunganui and Papamoa.

Of the 22 drink drivers caught at the weekend only two were under the age of 20.

''This is an encouraging sign that our youth are now in a position to set a benchmark for the rest of the community".

Ten percent of drivers nailed being youths seems high relative to their proportion of the driving population, but the standard varies across cohorts.

Overall, youth arrest rates for drink driving are substantially down. The reporter here seems to have gotten it, even if the sub-editor went for the inaccurate but eye-grabbing headline "Teens turn blind eye to drink-driving". From the story:

The number of teenagers arrested for drink-driving has halved almost a year after the zero alcohol limit was brought in for under-20s. Police figures show that in the first nine months since the law came into force on August 7 last year, 3091 youths aged 15 to 19 were arrested for drink-driving. The figure for the 12 months before the law change was 6414.

Previously, the drink driving limit for youths under 20 was 0.03. Here's the relevant section from the Land Transport Act 1998. Prior to the law change, consumption of alcohol in the 0.03 to 0.08 range drew a maximum term of 3 months or a fine of up to $2250 and a 3-month license suspension. Those consuming over 0.08, as I understand things, would draw the standard adult range of penalties: maximum jail term of up to 3 months, a fine of up to $4500, and driving disqualification for at least 6 months. The 2011 law change added an infringement offence for consumption in the 0 to 0.03 range: a fine and 50 demerit points.

A prior news story citing the same police figures gave a few more details:

The average numbers of those charged for having 30mg or more had dropped by about 43 per cent since the law change - from two charges per day to 1.1.On average, the numbers of arrests for youth drivers falling within the ‘‘new range’’ of alcohol restrictions dropped from about 18 charges before the law was introduced to 12.6 since.

I'm a bit confused by the stats on the 'new range'; I didn't think you could be arrested for being in the 0-0.03 range prior to the law change.

So:

1. Drink driving arrest numbers are not commensurable pre- and post- the law change; if behaviour had not changed, we would expect arrest rates among youths to have increased substantially.
2. That youth arrest rates dropped says that the bright line rule deterred behaviour.

I would be awfully curious to know more about the actual BAC for those charged before and after the law change.

The best argument for reducing the adult drink driving limit from 0.08 to 0.05 isn't the reduction in accidents among the cohort of drivers who test in the 0.05 to 0.08 range - that's almost certain to be trivially small relative to their representation among the cohort of drivers who were not involved in accidents.* Rather, it's that many people may intend on having only a couple of drinks but, after having gotten to 0.06, decide to have a few more drinks. Since they hadn't planned on getting drunk, they didn't plan on a ride home. And so they may wind up driving home drunk. A lower drink driving limit's benefit might then be in reducing the likelihood of transitioning to heavier drinking when driving home.

The change to the 0% threshold did nothing to affect the penalties faced by 19 year olds (compared to, say, 23 year olds) for consuming amounts of alcohol over the 0.08 threshold for more severe penalties. But it might have affect their likelihood of making plans to have a designated driver or to drink at all. If a substantial proportion of the reduction in under-20s drink-driving arrests comes from reduced numbers of youths consuming past the 0.08 limit (relative to the trend for 23 year olds), then we put more weight on the potential for a 0.05 adult limit to reduce adults' likelihood of driving with BAC > 0.08. If not, then we downweight that potential.

In either case, full cost-benefit analysis would need to weigh benefits from accident reductions against reduced consumption benefits to those who would not have gone on to impose increased accident risk on others: many adults, me included, would substantially curtail consumption to guard against the risk of accidentally going over 0.05 even if the vast majority of the time we never exceeded 0.04. It is a mistake to note that most adults' typical consumption would keep them below 0.05 and that consequently moderate drinkers benefits from moderate consumption would not change. Think of it this way: if we had the death penalty for going over 105 kph if the speed limit were 100, and the police said this shouldn't matter because most people drive the speed limit anyway, it would be a bit nuts. It's easy to accidentally hit 105 even when you're trying hard to stay at 100. It's harder to hit 112 by accident. So the death penalty for driving 105 would likely have most folks stick to 90, just to be safe. Same with a drink driving limit of 0.05: risk-averse people would target 0.03 or below just to be safe. The loss in consumption benefits would be real, and we'd better be sure that the reduction in accident rates is then worth it.

And so I wonder if the Police is collecting data on actual BAC among those breath-tested, and whether time series data on that sorted by age is anywhere available.


* And this, boys and girls, is why the police's emphasis on testing the BAC of those involved in accidents to see what portion fell in the 0.05 to 0.08 range by itself really doesn't help us a ton in deciding whether to cut the limit to 0.05. If 10% of drivers on the road from 8 pm to 4 am would test at .05 to .08, then they'd have to show up in more than 10% of accidents during that time of day to be over-represented. Unless we combine that accident data with data from random police checkpoints to get time-of-day population baselines, we just won't know whether they're over, under, or proportionately represented.