Temporal regulation and intertemporal substitution: The effect of banning alcohol at college football games

Abstract

A wide variety of consumption goods and activities are regulated, and in a wide variety of ways. Excise taxes are levied on the consumption of tobacco products, alcoholic beverages, playing cards and gasoline. Consumption of certain narcotics, pesticides, and "unsafe" products are quantity-controlled, even prohibited in some cases. Driving a car, getting married, gambling in a legal casino, and drinking alcoholic beverages are regulated on the basis of age of the consumer. Smoking is often restricted to designated "smoking areas." So-called "blue laws" regulate the hours and days that retail businesses can operate. Hunting and fishing are restricted to specific locations and specific times of the year. This paper is concerned with the regulation of time and place of consumption, or temporal regulation. For some goods, temporal regulation can be rationalized on the basis of controlling negative externalities. The induced substitution of consumption into other periods and locations presumably reduces the magnitude of the externality. Cigarette smoking, hunting and fishing fit into that category. Confining smoking to certain times and locations may not reduce total smoking output, but it may reduce the amount of the tobacco smoke externality.1 Restricting hunting and fishing to certain times of the year reduces the impact of the common-pool problem on the steady-state stock of animals and fish. In these cases, increased consumption in other periods is not a policy problem. Alcohol, however, is a different story. Regulation of the consumption of alcohol is usually rationalized as a way of