Impact of Alcohol Prohibition on Consumption Patterns

I use a nationally representative dataset to examine the impact of a statewide alcohol prohibition in Bihar on alcohol consumption by social groups. I use a difference-in-differences approach and employ robust checks to address endogeneity concerns and report causal estimates. The prohibition law contains stringent penal provisions, such as the presumption of guilt, life imprisonment, and the death penalty, etc. I find a 9 percent decline in alcohol drinkers in the general group and a 18 percent decline in marginalized group. This decline in drinkers is driven by a fall in weekly and occasional drinkers. I find no fall in marginalized daily drinkers and only a 3 percent fall in general daily drinkers. Across social groups, I observe a sharp reduction in the consumption of non-spurious alcohol and no impact on the consumption of spurious alcohol. I also detect that declines are more for low-potency drinks than hard alcohol across groups. I consistently find greater compliance among marginalized sections