Thursday, September 3, 2015
Jose M. Fernandez , Stephan Gohmann and Joshua C. Pinkston (University of Louisville - Department of Economics , University of Louisville - College of Business - Department of Economics and University of Louisville) have posted Breaking Bad: Are Meth Labs Justified in Dry Counties? on SSRN. Here is the abstract:
This paper examines the influence of local alcohol prohibition on the prevalence of methamphetamine labs. Using multiple sources of data for counties in Kentucky, we compare various measures of meth manufacturing in wet, moist, and dry counties. Our preferred estimates address the endogeneity of local alcohol policies by using as instrumental variables data on religious affiliations in the 1930s, when most local-option votes took place. Alcohol prohibition status is influenced by the percentage of the population that is Baptist, consistent with the “bootleggers and Baptists” model. Our results suggest that the number of meth lab seizures in Kentucky would decrease by 24.4 percent if all counties became wet.