Centre for Development Economics
Department of Economics
Delhi School of Economics
ANNOUNCE A SEMINAR
Bans, Borders, and Behavior: Evaluating Alcohol Prohibition under Spatial Spillovers
by
Rashmi Barua
(Economics and Planning Unit)
(Thursday, August 6, 2026)
Venue: TBA
Abstract:-
Governments often use alcohol prohibition to reduce substance abuse and related social harms, yet such policies are frequently implemented in settings with permeable administrative boundaries and uneven enforcement. We study a sudden, state-wide alcohol ban in India using two rounds of nationally representative cross-sectional data. Leveraging geocoded survey data and a ring-based difference-in-differences design, we show that neighboring jurisdictions experience sizable spillovers from prohibition, severely understating standard difference-in-differences estimates. When we use a control group that is unlikely to be exposed to these spillovers, we find that prohibition increased overall alcohol consumption, shifted sourcing away from regulated markets toward informal channels, and raised smoking prevalence. These unintended consequences are disproportionately borne by the poor and vary systematically across religious groups, reflecting differences in access to informal markets and the role of social norms in constraining substitution. The results suggest that supply-side bans in settings with permeable administrative boundaries and widespread informal markets may relocate consumption rather than reduce it, generating new public health risks while disproportionately burdening the most disadvantaged.
JEL Codes: I18, I12, C23, K42
Keywords: Alcohol; India; Prohibition; Spillovers