New Evidence of the Effects of Zero Tolerance Laws on Drinking and Driving. The Case of Chile∗ Sebasti´an Otero Tom´as Rau (J-PAL) (PUC Chile) This version: August 2014 PRELIMINARY: PLEASE DO NOT CITE OR QUOTE Abstract In 2012, the Chilean government enacted a zero tolerance law that lowered the permissible blood alcohol content (BAC) threshold from 0.5 to 0.3, which also instituted severe financial and license revocation penalties for drivers of all ages. Using a rich panel municipality-level administrative record data set, this paper employs a difference-in-differences strategy to es- timate the causal impact of the law on car accidents and fatality rates. Results indicate that the law reduced the number of alcohol-related car accidents by 18% to a quarter of all accidents, which is entirely driven by non-fatal incidents. Evidence also indicates that the law works by increasing sober driving, not by reducing drunk drivers' alcohol consumption. Supporting current findings, this paper also shows evidence that the law has no effects on fatality rates. Lastly, it shows a three-month-long anticipation effects that coincide with the bill's announcement, which we attribute to a public confusion of the difference between the announcement and the enactment of the law. JEL codes: K32, R41 Keywords: Zero Tolerance, BAC, Alcohol Law, Deterrence, Drunk Driving. ∗We thank the funding granted by Vicerrector´ıa de Investigaci´on, Conicyt's magister scholarship and Fondecyt. The usual disclaimer applies. Any comment to the authors' email address:
[email protected],
[email protected]. 1 1 Introduction Motor vehicle accidents cause 1.24 million deaths and an 20 to 50 million injuries yearly world- wide (WHO, 2013).