For example, Nelson (1990) found that the prices were slightly higher in monopoly States compared with prices in license States, whereas MacDonald (1986) concluded the opposite. Several studies focusing on the impact of exclusive territory policies for beer distribution determined that these policies did how to get someone fired result in higher beer prices (Culbertson 1989; Culbertson and Bradford 1991; Jordan and Jaffee 1987; Sass and Saurman 1993, 1996). In addition, several studies consistently have demonstrated that current excise taxes are substantially below the “optimal” level when one considers the external costs (i.e., costs borne by nondrinkers or moderate drinkers) of alcohol use.
Summaries of such studies were published more than a decade ago [8, 9] (for a systematic review restricted to the European Union, see Barrio et al. [12]), while several dozen additional studies have been published since [13]. Alcohol-attributable costs to society are captured by cost-of-illness studies, however estimates are often not comparable, e.g. due to the omission of relevant cost components. In this contribution we (1) summarize the societal costs attributable to alcohol use, and (2) estimate the total costs under the assumption that all cost components are considered.
Summary of Main Findings
In other words, people who do not use alcohol have been subsidizing alcohol users, especially the top 20 percent of drinkers who consumed approximately 85 percent of all alcoholic beverages (Rogers and Greenfield 1999). However, only eight studies reported measures of uncertainty around selected point estimates and no single study reported measures of uncertainty for all estimates. As the measures of uncertainty constitute one of the two sources of variation required for random-effects meta-analyses, we relied only on the other source of variation, i.e. the difference in the methodology in estimating costs. To achieve this, we calculated weights for each study describing the proportion of all possible costs included, ranging from 0 to 1.
An inverse relationship also has been identified between beer taxes and abortion rates among teenagers (Sen 2003). This observation has been confirmed by individual-level data from the Youth Risk Behavior Surveys, which demonstrated that increases in beer taxes promoted the use of condoms and other birth-control methods among teenagers (Grossman and Markowitz 2005). In all studies examined in this study, alcohol use incurred substantial costs and, if all harms caused by alcohol were to be included, these costs are estimated to amount, on average, to 1306 Int$ per adult or 2.6% of the GDP in the countries examined. As a consequence, the findings underscore and reiterate the message given by international organizations to reduce the use of alcohol [4].
Effects of Prices on Consequences of Alcohol Abuse
Although the findings are mixed about the relative price sensitivity of abusive and nonabusive drinkers, most studies have reported that heavy/frequent drinkers normally are less responsive to price changes than light/infrequent drinkers. Thus, the estimated price elasticity of abusive drinkers ranges from −0.01 to −0.10 (Chaloupka and Laixuthai 1997; Chaloupka and Wechsler 1996; Cook and Moore 2000; French et al. 2006; Keng and Huffman 2007; Kenkel 1993, 1996; Laixuthai and Chaloupka 1993, Sloan et al. 1995; Stout et al. 2000). A more recent review of 10 studies on the effects of alcohol prices on various measures of alcohol abuse indicated that the average price elasticity was −0.28 (Wagenaar et al. 2009). Excise taxes create a wedge between the price that producers receive for their products and the final retail price that consumers pay. From a theoretical perspective, increases in excise taxes therefore automatically should lead to increases in the final retail prices of alcoholic beverages. The extent to which changes in excise taxes can be passed on to the final prices is an empirical question.
Despite numerous pleas to standardize the methodology (e.g. Møller and Matic [14]), we are still faced with a situation in which many different methodologies to estimate these costs have been used over the past decade [13]. We show that there is large variation in the studies with respect to which cost components are considered and that these differences should be accounted for. However, we also found methodological homogeneity, as nearly all studies followed a top-down approach, with indirect costs being calculated based on human capital assumptions. For (b), we divided the costs by the respective study weights, separated for the two cost indicators, thus correcting for omissions of relevant cost components. Did you know that the destructive and irresponsible use of alcohol and other drugs costs North Carolina more than $6.8 billion annually?
While these estimates overlap with our figures after adjustment for underreporting of omitted cost components, our unadjusted estimates are well below previous findings. First, the decline in drinking levels and attributable burden in many high-income countries [41, 42]; second, a lower study quality, i.e. exclusion of relevant cost components in more symptoms of roofied recent studies; and third, overproportional increases in the GDP relative to alcohol-attributable costs. This article first briefly reviews trends in alcoholic-beverage excise taxes as well as the limited literature addressing the connection between taxes and prices. The majority of the article then focuses on studies investigating the effects of prices (or taxes) on alcohol use and abuse and related adverse consequences (for additional reviews, see Chaloupka 2002; Chaloupka et al. 1998, 2002; Cook and Moore 2000, 2002; Wagenaar et al. 2010). Given the size and scope of the literature in this area, this article is not intended to be an encyclopedic review but aims to summarize the general findings and highlight recent studies.
Many studies have shown that in addition to reducing alcohol use and abuse, increased prices also decrease the adverse consequences resulting from alcohol use and abuse. Extensive literature exists of studies assessing the effects of changes in price on the levels of alcohol use and abuse. Because of the vast amount of literature available, this review focuses mainly on findings alpha-pyrrolidinopentiophenone function from published meta-analyses and reviews and only uses individual studies for illustration, where relevant. We used each state’s average life expectancy to find the years of drinking (age 21 and over), then compared this with each city’s weekly drinking habits and cost of alcoholic drinks. The three cities that spend the most — New York, NY, Minneapolis, MN, and Miami, FL — all spend $116,000 or more on drinks over a lifetime. Those that spend the least — Birmingham, AL, New Orleans, LA, and Memphis, TN — each spend $57,000 or more.
Share of Direct and Indirect Costs
- Thus, the limited empirical evidence indicates that increases in alcoholic-beverage excise taxes likely would lead to even larger increases in prices.
- In addition to tax-related polices, several other regulations also may directly or indirectly affect the prices of alcoholic beverages.
- As we did not account for these and other confounding factors in our analyses, the link between alcohol exposure may not be observable.
- Several studies have addressed the effects of alcohol prices on the drinking behaviors of youths and young adults.
Early studies showed that increases in beer taxes significantly reduced fatal motor-vehicle crash rates, particularly among youth (Cook 1981; Saffer and Grossman 1987a, b). Subsequent studies using updated panel data and robust specifications consistently confirmed the conclusion that higher taxes and prices significantly reduce drinking and driving (Chaloupka et al. 1993; Ruhm 1996; Sloan et al. 1994). As a consequence of these policies, competition is reduced at some point in the local supply chain for alcoholic beverages, and economic theory predicts that prices would be higher in such less competitive markets. However, the empirical evidence on the impact of these policies on prices is limited and, at times, inconsistent.
Your significant other may also try and make up excuses for your drinking or improper conduct at social functions. This can be a heavy burden for them to carry and may place a distance between their friends and family as well. Whether happy hours with coworkers, a glass of wine with dinner, a beer or two to take the edge off of a long day, or late-night partying with friends—enjoying adult beverages is a proverbial rite of passage amongst Americans.
Effects of Price on Alcohol Use Among Youth and Young Adults
Taken together, the findings confirm an inverse relationship between alcohol prices and the demand for alcohol consumption—that is, the higher the price, the lower the demand. Moreover, policies that raise alcoholic-beverage taxes and, consequently, prices are effective in reducing alcohol use and abuse as well as related health, economic, and social consequences. The economic costs that result from alcohol use and abuse provide another strong argument for raising excise taxes on alcoholic beverages. In 2006, the Federal Government received about $9.2 billion from alcohol excise taxes, with State governments collecting another $4.9 billion. By comparison, the economic costs of excessive drinking in 2006 were estimated at $223.5 billion (Bouchery et al. 2011).
Total Alcohol-Attributable Costs
When you look at how much drinking alcohol can affect your life, especially for those who are potentially abusing it or suffering from alcoholism, it may be time to ask yourself, “Is it worth it? ” Your health, the relationships you have, your finances, and your career goals may all be affected and at the end of the day, you have to decide what you want your future to look like. 3License States are States that adopt a mixed set of regulations to influence the extent of competition in alcoholic beverage markets rather than directly control distribution and sale of these beverages. Please refer to the section, Other Polices Affecting Alcoholic-Beverage Prices, for a detailed discussion on license States. The identified cost studies were mainly conducted in high-income settings, with high heterogeneity in the employed methodology. Accounting for some methodological variations, our findings demonstrate that alcohol use continues to incur a high level of cost to many societies.
Adjusting for omission of cost components, the economic costs of alcohol consumption were estimated to amount to 1306 Int$ per adult (95% CI 873–1738), or 2.6% (95% CI 2.0–3.1%) of the GDP. About one-third of costs (38.8%) were incurred through direct costs, while the majority of costs were due to losses in productivity (61.2%). A systematic review and meta-analyses were conducted for studies reporting costs from alcohol consumption for the years 2000 and later, using the EMBASE and MEDLINE databases. Cost estimates were converted into 2019 international dollars (Int$) per adult and into percentage of gross domestic product (GDP).
On the other hand, Birckmayer and Hemenway (1999) failed to find an association between beer tax and suicides among youth. Finally, Yamasaki and colleagues (2005) demonstrated that increases in alcohol taxes correlated significantly with suicides in male but not in female subjects. These inconsistencies regarding the relationship between prices of alcoholic beverages and suicide may result from measurement errors in the dependent variable, because not all suicides were alcohol related. In fact, according to a meta-analysis by Smith and colleagues (1999), blood alcohol concentrations (BACs) indicative of intoxication (BAC more than or equal to 100 mg/dL) were found in a much smaller percentage of suicide cases (i.e., 22.7 percent) than of homicide cases (31.5 percent). In general, a meta-analysis based on 11 independent estimates from four studies indicated that the impact of prices of alcoholic beverages on suicide only was marginally significant (Wagenaar et al. 2010).