The effects of residential proximity to bars on alcohol consumption

A person's decision to drink alcohol is potentially influenced by both price and availability of alcohol in the local area. This study uses longitudinal data from 1985 to 2001 to empirically assess the impact of distance from place of residence to bars on alcohol consumption in four large U.S. cities from 1985 to 2001. Density of bars within 0.5 km of a person's residence is associated with small increases in alcohol consumption as measured by: daily alcohol consumption (ml) drinks per week, and weekly consumption of beer, wine, and liquor. When person-specific fixed effects are included, the relationship between alcohol consumption and the number of bars within a 0.5 km radius of the person's place of residence disappears. Tests for endogeneity of the number of bars within the immediate vicinity of respondents' homes fail to reject the null hypothesis that the number of bars is exogenous. We conclude that bar density in the area surrounding the individuals' homes has at most a very small positive effect on alcohol consumption.