Who Owns Red? Maker's Mark and Jose Cuervo Fight It Out

A few months ago we wrote about whether shoemaker-to-the-stars Christian Louboutin ought to have a monopoly over red shoe soles. Last week, in Kentucky, a similar issue arose concerning red wax. The red in question was on the neck of bottles of booze—specifically, Maker’s Mark bourbon and Jose Cuervo’s Riserva de la Familia tequila, which both feature a bottle cap seal made of red, dripping wax (Cuervo has since shifted to a straight-edged red wax seal).  Maker’s, which used the dripping wax seal first, sued Cuervo, claiming trademark infringement.

A Bar With Changing Prices

Reader Thomas Barker writes in about a bar called D Street in Encinitas,CA. that prices its drinks based on demand:

I was recently at a bar for 25-cent wing night that I had not gone to in a while and saw something I thought you guys would be interested in. It was a drink price index ticker and they had them on TV's all over the bar. It seemed that if a drink wasn't ordered in a 15-minute time span the drink would go down a few cents. When we showed up my friend had his eye on an irish car bomb which was over $5 at the time, in the hour or so we were there it went down to his target range of about $3.75. As soon as his was ordered it jumped back up over $4.

Alcohol as Muse

New research indicates that alcohol, which many a moody poet has indulged in, may actually increase creativity. Psychologists Andrew F. Jarosz, Gregory J.H. Colflesh, and Jennifer Wiley recruited 40 males, got half of them a little tipsy on vodka, and then subjected them to the "Remote Associates Test," which tests insightful thinking.  Their results, as summarized by the BPS Research Digest, were surprisingly good:

The Positive Effects of a Higher Alcohol Tax

Philip J. Cook and Christine Piette Durrance have published a working paper called "The Virtuous Tax:  Lifesaving and Crime-Prevention Effects of the 1991 Federal Alcohol-Tax Increase." It makes a substantial argument for the upside of higher alcohol taxes:

On January 1, 1991, the federal excise tax on beer doubled, and the tax rates on wine and liquor increased as well. ... We demonstrate that the relative importance of drinking in traffic fatalities is closely tied to per capita alcohol consumption across states.  As a result, we expect that the proportional effects of the federal tax increase on traffic fatalities would be positively correlated with per capita consumption. 

Cause of Death: Drinking More Acceptable Than Smoking in UK

A new study in the Journal of Clinical Pathology from Ian Proctor, Vijay Sharma, Mohammad KoshZaban and Alison Winstanley, reveals doctor biases towards smoking and smokers. The researchers looked at 2,128 death certificates, and 236 postmortems issued at a large London teaching hospital between 2003 and 2009. They found that while alcohol was listed as a major contributor to 57.4 percent of death certificates, smoking was only listed as a cause of death in .5 percent of cases, and usually a secondary cause at that. Considering that 279 of those deaths included either lung cancer or chronic obstructive pulmonary disease -- that's a bit strange.

This study serves as a bellwether of the western world’s campaign to stop smoking. Cigarette packages in the UK carry punitive phrases such as “smokers die younger,” and “smoking can cause a slow and painful death.” More recently, every cigarette pack has been required to carry a graphic image as well: pictures of black lung, throat cancer, and even a corpse. Scarier messages and pictures are coming to the U.S. too. There’s no doubt that our attitudes towards smoking have changed immensely; so drastically, in fact, that the authors conclude that doctors would rather lie and spare a family the eternal shame of having a loved-one remembered as a smoking bandit:

The Fixed Costs of Retailing Bourbon

The Bourbon Outfitter in Lexington, Kentucky sells souvenirs and paraphernalia related to bourbon distilling and drinking. Its only physical retail outlet is a kiosk in a shopping mall; and its selling season is the Christmas shopping period. Its difficulty is that the mall will only rent kiosk space in three-month intervals—the kiosk is a fixed cost to The Outfitter, which has come up with the following solution: It rents the kiosk from November through January, and opens on November 1, sufficient time before Black Friday to make an impression on shoppers. It stays open until New Year's and then closes down.

The owner tells me that this is a profit-maximizing policy, since the variable cost of remaining open after New Year’s Day far exceeds the trickle of revenue that might flow in.

[HT to BK]

An Alcohol Tradeoff

Fifteen years ago, on a visit to Peru, I drank many pisco sours and decided I had to buy a duty-free bottle of pisco. It has sat unopened in our liquor cabinet since then. A colleague mentioned he had bought a number of bottles of a South African liqueur, Amarula Cream, that tastes a lot like Baileys Irish Cream, which we love. Chatting, we suggested a trade, since he’s a pisco sour fancier, as is his wife.

The trade is now consummated, and both we and our wives are happier for it. No monetary transaction, but I am convinced that everybody is better off—this is a real Pareto improvement.

(HT to LL)

How Common Is Drugged Driving?

From a recent USA Today article by Jonathan Shorman comes an astounding (to me) set of facts about drugs and driving that certainly ought to be considered as part of the conversation about decriminalizing marijuana:*

Researchers examined data on more than 44,000 drivers in single-vehicle crashes who died between 1999 and 2009. They found that 24.9% tested positive for drugs and 37% had blood-alcohol levels in excess of 0.08, the legal limit. Fifty-eight percent had no alcohol in their systems; 5% had less than 0.08. The data were from a government database on traffic fatalities.

Study co-authors Eduardo Romano** and Robert Voas of the Pacific Institute for Research and Evaluation in Calverton, Md., say their study is one of the first to show the prevalence of drug use among fatally injured drivers. Among drivers who tested positive for drugs, 22% were positive for marijuana, 22% for stimulants and 9% for narcotics.

Does Privatizing Retail Alcohol Sales Increase or Decrease Consumption?

If you've ever bought alcohol in Pennsylvania, you know what a weird, controlled system it has. As 1 of 19 "alcoholic beverage control" states in the U.S., Pennsylvania has some of the more strict, if not bizarre, laws regulating the retail sales of booze. Wine and spirits are sold only by state-owned stores, which don't even have names; they're designated by call numbers instead. Prices are kept uniform in all locations. Many of the stores operate at a loss. If you're under 21, you're not even allowed inside, and until recently, you couldn't buy alcohol on a Sunday. Oh, and check out its "Kafka-esque" system of grocery store wine vending machines.

This may all be about to change. Pennsylvania is debating whether to privatize its liquor sales as a way to raise money and bridge its budget gap.

Do We Drink Because We're Monogamous, or Are We Monogamous Because We Drink?

Our latest Freakonomics Radio podcast is called "Do More Expensive Wines Taste Better?" It features some research presented by the American Association of Wine Economists, whose members include Karl Storchmann, managing editor of the group's Journal of Wine Economics.

Storchmann wrote to us the other day about an interesting working paper the AAWE has just posted: "Women or Wine? Monogamy and Alcohol," by Mara Squicciarini and Jo Swinnen.