(FORTUNE Magazine) – We remember being favorably impressed by a study, published five years ago by the National Bureau of Economic Research (NBER), demonstrating that you could substantially reduce smoking by using the price mechanism -- specifically, by raising the price of smoking. Although already heavily taxed, cigarettes might be hit harder still. Just as you suspected, higher prices would not substantially deter smoking among the middle-aged addicts; however, the ''price elasticity of demand'' was quite high for young people not yet addicted, especially young men. (For reasons not explained by the NBER folks, the elasticities were lower for young women.) In effect, higher prices could keep young people from becoming addicts in the first place. This finding has had zero influence on government policy. Politicians seem to be made uneasy by approaches that rely on market forces, which are diffuse and impersonal, and much prefer programs in which some kind of enforcement mechanism is onstage and dramatically reordering what people do. As in, for example, the federal regulation that is now trying to combat drunk driving by ! getting the states to raise their drinking ages. That brings us to some more recent findings of NBER-sponsored research, which are about beer. Prepared by a team of researchers under Professor Michael Grossman of the City University of New York, the paper reflects an analysis of demand elasticities for beer among young persons and concludes that in recent years about 1,000 lives annually would have been saved by a tax of around $2 per case of beer. The professor's simulations also show that a nationwide age limit of 21 would have been saving only about 555 lives annually. The data are soon to be published in the Journal of Legal Studies at the University of Chicago, long a bastion of sound thinking about economics but not yet in control at the political level.