Breaking Bad: Are Meth Labs Justified in Dry Counties?
Jose M. Fernandez
University of Louisville - Department of Economics; University of Louisville - College of Business and Public Administration
University of Louisville - College of Business - Department of Economics
Joshua C. Pinkston
University of Louisville
August 25, 2015
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.
Number of Pages in PDF File: 37
Keywords: Alcohol prohibition, methamphetamine production, dry counties
JEL Classification: K42, I1, K32
Date posted: August 26, 2015