Traditionally, the United States has implemented a total prohibition with regard to buying and selling of alcoholic beverages; however, the government perception about the prohibition was changed during the beginning of the 20th century. …
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Today, the alcohol industry in the U.S. is treated in different manners wherein some communities are conservative while some are against the prohibition. The conservative community does not want to legalize the selling of alcoholic drinks in the market because it could cause social and economic problems brought by unpleasant behaviors (Dull & Giacopassi, 1988). Also, they argued that this is not the only solution left to improve the economic status of a county and remain competitive. This issue has been debated in the U.S. since the 1990s, which has led to different social movements and the approval of the prohibition. However, it was only in the early 20th century that this regulation has been reviewed and reconsidered; in fact, almost all counties are giving their people an opportunity to vote in the wet/dry referendum. The main thrust of this paper is to discuss the alcohol wet/dry issue in terms of tourism, revenue, and economic impact, particularly in the United States. 2. Alcohol Wet/Dry It was in the late 1990s that the total prohibition on alcohol consumption was eliminated. However, every county in the U.S. was given equal opportunities to regulate the alcohol sales market; hence, there is no exact description about the dry/wet issue because individual states have their own understanding of the term (Wheeler, 2012). Those counties in a state that restricted the distribution of alcoholic beverages anywhere and anytime in their communities are known as “dry” (not legal) while those, which have totally or partially allowed alcohol consumption, are called “wet or moist” counties. Nowadays, alcohol analysts have commented that economies of dry counties are not competitive in today’s rapidly changing and highly competitive environment (Hampson, 2010). They have argued that the total prohibition of selling alcoholic beverages has something to do with this problem. Table 1: Dry and Wet Counties Source: Hampson (2010) Table 1 above shows the number of dry and wet counties in the major states of America. The data have illustrated that dry counties are moving towards the amendment of policy in favor of the wet initiative, which is to legalize the distribution and consumption of alcoholic drinks. 3. Tourism In the 21st century, most of the countries worldwide have been investing in tourism activities considering that these have a positive impact on economic performance, particularly to the GDP (Organisation for Economic Co-Operation and Development [OECD], 2010, p. 88). Furthermore, it is perceived as the economic breadwinner of both developed and developing nations considering that it is today’s most rapidly growing industry and world’s largest export earner (Harrison, 2007, p. 61; Higgins-Desbiolles, 2006, p. 1192). In fact, the tourism industry is one of the largest industries in the United States in terms of employment profile, tax revenue, and spending pattern of travelers (Milne & Backhausen, 2003, p. 8). The growth of the U.S. tourism industry is closely related to other industries including the alcoholic drinks industry as a peripheral service (Buglass, 2011). Hence, being a dry county (total prohibition) could restrict inbound and drink tourists, and decrease personal consumption expenditures. Figure 1 below shows a decrease in consumption expenditure that shifts the demand (D) curve to the right from D1 to D2, causing a new equilibrium for price (P1 to P2) and quantity demanded of real GDP from Y1 to Y2. Figure 1: Consumption Expenditure vs. GDP On the other hand, it was also during the prohibition period that the level of crimes, health-related problems, explosions, and anti-alcohol protests in the U.S. has been increased (Knight & Martinez-Vergne, 2005, p. 245). Thus, tourists
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