Economic Evidence Regarding Alcohol Price Elasticities and Price Responses by Heavy Drinkers, Binge Drinkers, and Alcohol-Related Harms: Summary of Results for Meta-Analysis, Systematic Reviews, and Natural Experiments in Alcohol Policy.
Numerous economic studies examine effects of alcohol price and tax changes on drinking, drinking patterns and alcohol-related harms. The consensus view is that prices are an effective instrument for addressing issues of heavy drinking, binge drinking, and adverse outcomes associated with alcohol. In a series of published studies, I present evidence that this view is overly optimistic, and results for alcohol prices are more varied, complex, or nuanced. This paper provides a brief overview of main results in eight studies. Alcohol tax and price interventions have selective, rather than broad, impacts on sub-populations, drinking patterns, and alcohol-related harms.
Economic theory predicts that consumer demand for products and services responds to changes
in real prices or real income, holding other key variables constant (e.g., prices of substitutes, prices of complements, product availability, product promotion, etc.). Theory predicts neither the magnitude of price response by individuals nor exact patterns of responses across groups
of individuals. It is not sensible to claim that all individuals respond in the same manner or to
the same degree for a tax-induced change in alcohol prices. Establishing the magnitude of price
response for individuals and groups requires statistical evidence, possibly based on several
different methodologies.
In a series of published reviews, I examine evidence related to alcohol prices, taxes, and patterns of change for both drinking outcomes and alcohol-related harms. Three of my papers use meta-analysis.
Public Health Open J. 2016; 1(2): 36- 39. doi: 10.17140/PHOJ-1-108
