Tuesday, November 20, 2007

Closing Time in Annapolis

Someone in Annapolis, Maryland reads this blog just about every day. Thanks Annapolis. So in honor of them, I would like to take on an economic issue that concerns Annapolis, bar closing time. According to this article, about ½ of the bars in Annapolis can stay open until 2am, the other ½ need to close at Midnight. A few interesting questions, perhaps my friend in Annapolis can help.

1. Does the midnight rule for some actually, reduce the number of people making a lot of noise leaving bars at 2am, if people can just go to another bar then leave again at 2am. If anything I would thinking herding people into fewer bars would make more problems
2. Economic theory would suggest that if fixed cost can be spread out over more hours, then drinks should be cheaper at 2am bars (adjusting for other factors). This could really hurt the midnight bars.
3. Are there any midnight to 2am drink specials?

To follow a play by play of the exciting city council meeting debating this very issue, from a blog that has previously linked here, check out Annapolis Politics.

I’m likely going to Annapolis this weekend with my in-laws, we will probably be eating crab and not drinking past midnight, but I’m always willing to help research.


Brian Gill said...

Your blog is in my rotation, although I don't quite check it every day so you may have at least 2 readers from Annapolis!

I graduated with an econ degree from Maryland, and try to apply that to politics. The 2 am bar issue is a great study in public choice economics and rent seeking, as a small but wealthy and well organized citizens continue to prevent any new 2 am legislation.

Thanks for the shout out.
Brian (annapolispolitics.blogspot.com)

Brian Gill said...

I just realized I didn't get to any of your questions--I will try and to that tonight.

Brian Gill said...

the problem stems from a 1992 compromise banning new 2 am licenses in the historic district. so, other zoning districts (that are sometimes within 200 feet of the historic district) can get as many 2 am licenses as they want. also, 2 am bars existing prior to 1992 were grandfathered, but new bars in the area are relegated to midnight. big equity problem. also, if laws were being enforced, the closing time itself wouldn't be an issue. a comprehensive post on the issue can be seen here: http://annapolispolitics.blogspot.com/2007/11/2-am-magnum-opus.html. to try and answer your questions:

1. Midnight licenses for some likely does not change the noise making. There is data from the police department, and if I remember correctly there is a slight increase in nuisance crimes between the hours of 12-2.

It seems likely that if all bars closed at the same time, be that time midnight or 2 am, there would be fewer problems because the crowds would be dispersed as you suggest.

The bigger problem is the bars themselves. Enforcement of laws for bars and bar patrons is lax, so bars have reduced incentives to run responsible operations. Certain bars try to help the community and only let in a certain crowd, etc., but others don't care. There are problem and good bars that close at 2 am, as well as midnight, suggesting that the time itself is not too important.

2. You might be right, but there are too many other factors to know for sure. Availability of outside seating, proximity to the water, ambiance, size, cover charge, live music, and parking are all determinants of the price of a drink, and it would be nearly impossible for an amateur economist like myself to design a statiscal analysis that would identify the closing time variable alone.

As a rule, the drinks at the 2 am bars are no cheaper than the midnight establishments.

3. There is one bar that I know of that offers midnight-2am specials: Rams Head. But in general, the 2 am bars take advantage of scarce resources--people still want to drink and with fewer bars to go to, they can charge whatever they want.