Brewing up entrepreneurship: government intervention in beer

Trey Malone (Department of Agricultural Economics, Oklahoma State University, Stillwater, Oklahoma, USA)
Jayson L. Lusk (Department of Agricultural Economics, Oklahoma State University, Stillwater, Oklahoma, USA)

Journal of Entrepreneurship and Public Policy

ISSN: 2045-2101

Publication date: 7 November 2016

Abstract

Purpose

While previous studies have looked at the negative consequences of beer drinking often as a prelude to discussing benefits of laws that curtail consumption, the purpose of this paper is to understand the downside of such regulations insofar as reducing entrepreneurial activity in the brewing industry.

Design/methodology/approach

Using a unique data set from the Brewers’ Association that contains information on the number and type of brewery in each county, this study explores the relationship between the number of breweries and regulations targeted at the brewing industry. Zero-inflated negative binomial regressions are used to determine the relationship between the number of microbreweries and brewpubs per county and state beer taxes, self-distribution legislation, and on-premises sales.

Findings

The authors find that allowing breweries to sell beers on-premises as well as allowing for breweries to self-distribute have statistically significant relationships with the number of microbreweries, brewpubs, and breweries. The authors do not find an economically significant relationship between state excise taxes and the number of breweries of any type.

Originality/value

Results suggest that whatever public health benefits are brought about by alcohol laws, they are not a free lunch, as they may hinder entrepreneurial development.

Keywords

Acknowledgements

The authors would like to thank Stephan Gohmann at the University of Louisville, Martin Stack at Rockhurst University, and Bart Watson at the Brewers Association for providing access to their data and expertise. The authors are also grateful to two anonymous reviewers, whose comments and suggestions significantly improved the article.

Citation

Malone, T. and Lusk, J. (2016), "Brewing up entrepreneurship: government intervention in beer", Journal of Entrepreneurship and Public Policy, Vol. 5 No. 3, pp. 325-342. https://doi.org/10.1108/JEPP-02-2016-0004

Download as .RIS

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.