The Effects of Prices on Alcohol Use and its Consequences PMC

A large and growing literature has explored the impact of prices of alcoholic beverages on alcohol use and abuse as well as related adverse consequences. The vast majority of these studies provide strong evidence supporting efforts to raise Federal or State taxes to promote public health by reducing drinking, including abusive drinking how to wean off alcohol and safely taper drinking and its consequences. More importantly, these studies clearly indicate that adolescents and youth are more responsive to changes in prices than the general population, implying that the implementation of tax policies not only could produce immediate public health benefits but achieve even greater success in the long run.

Over the past three decades, economists and others have devoted considerable effort to assessing the impact of alcoholic-beverage taxes and prices on alcohol consumption and its related adverse consequences. Federal and State excise taxes have increased only rarely and, when adjusted for inflation, have declined significantly over the years, as have overall prices for alcoholic beverages. All of these findings indicate that increases in alcoholic-beverage taxes could be a highly effective option for reducing alcohol abuse and its consequences. We corroborate previous estimates, indicating that health care spendings only make up a fraction of total costs (13% in the 2009 review; 18% in our study), while productivity losses are the main cost driver (72% in the 2009 review; 61% in our study). Furthermore, our results, based on a larger number of studies from more recent years, are in line with total costs estimates of a 2009 review, according to which alcohol-attributable economic costs amounted to 2.5% and 2.1% of the GDP in high- and middle-income countries, respectively [8, 41].

These investigators failed to detect a significant relationship between tax rates and drinking-and-driving rates. Likewise, Dee (1999) and Young and Likens (2000) found that there was little relationship between beer taxes and motor-vehicle fatalities, and the significance of the relationship was very sensitive to the specification of regression models. As one explanation for these inconsistencies, Mast and colleagues (1999) argued that the minimum legal drinking ages had been higher in the later years of data collection, which means that beer taxes had become a smaller part of the “full price” of teen drinking.

1. Had the highest cost per person ($1,526, compared to the $807 national average), and New Mexico had the highest cost per drink ($2.77, compared to the $2.05 national average).
2. The identified cost studies were mainly conducted in high-income settings, with high heterogeneity in the employed methodology.
3. The variation around point estimates is given by 95% confidence intervals (CIs) based on the standard error.

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). For each study, weights were calculated to correct for the exclusion of cost indicators.

What About Costs and Insurance?

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).

Effects of Prices on Consequences of Alcohol Abuse

Lastly, we examined the link of the two cost indicators with the annual amount of pure alcohol intake (in litres) per capita and per drinker as two different indicators for population alcohol exposure as a proxy for the causal driver for incurred costs (for total, direct, and indirect costs). 4 (see ESM 1), alcohol exposure was not clearly linked to both cost indicators, suggesting other unobserved factors to be more relevant for incurred costs than alcohol exposure itself. 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. Pogue and Sgontz (1989) showed that the “best-guess” estimate based on their model was 51 percent of the net price of the beverage (i.e., price excluding tax), whereas Kenkel (1996) estimated the optimal tax should be around 106 percent of the net price. Two other studies (Manning et al. 1989; Saffer and Chaloupka 1994) suggested that the excise tax rates during their study period would have had to be doubled to reach the optimal level. Given that State and Federal taxes generally have not kept pace with inflation since these studies were done (see figures 1 and ​and2),2), the “optimal” tax likely would have to be even higher today.

But I don’t love when people ask me about drinking alcohol since usually, they’re not going to like my answer. While alcohol has some health benefits, it is still a toxin and should be consumed sparingly. Here, I answer some of the most common questions is it possible to get sober without aa I get about drinking booze to help you make more informed decisions about your next nightcap or happy hour. For example, if you are a binge drinker on the weekends, you may only drink one day, but you consume two bottles of wine during that day.

Q. Is It OK to drink alcohol everyday?

By repeating this procedure, we accounted for the inclusion of all relevant cost categories at each level for each study. To date, evidence such as the findings presented here has had little impact on public policy, with the Federal Government and most State governments allowing the inflation-adjusted value of their alcoholic beverage taxes to fall as demonstrated by the infrequent and modest increases in these taxes. In contrast, the Federal Government and many State governments have adopted several large increases in taxes on cigarettes and other tobacco products, at least in part to promote public health by reducing tobacco use. Similarly, indexing alcohol excise taxes to inflation in order to prevent substantial reductions in real tax rates would help ensure that higher taxes have a sustained impact on drinking and its consequences.

If you think you may have a medical emergency, immediately call your physician or dial 911. Alcohol consumption by an expectant mother may cause fetal alcohol syndrome (FAS) and pre-term birth complications. The harmful use of alcohol can also result in harm to other people, such as family members, friends, co-workers and strangers. All authors have completed the International Committee of Medical Journal Editors (ICMJE) uniform disclosure form at /coi_disclosure.pdf, and declare no support from any organization for the submitted work. The authors have no other relationships or activities that could appear to have influenced the submitted work.

Alcoholics Resource Center

Excise-tax policies vary widely across States, with some States imposing taxes on prices (i.e., ad valorem taxes) and others levying excises on quantity or volume (i.e., specific taxes). All States impose a tax on beer; in addition, all license States also impose taxes on wine and spirits.3 In general, these State excise taxes are highest for distilled spirits. State excise taxes, for the most part, have followed the same patterns as Federal taxes, with only infrequent and modest increases that have resulted in substantial declines over time in the real values of these taxes. The degree to which the real value of the State taxes has dropped depends on the inflation rate and the latest tax rates imposed by a given State. More than 20 States have not raised their beer taxes for at least 20 years, and only about 10 States have raised them in the last decade.4 In some extreme cases, the deflated tax rates per drink have even declined to close to zero.

These investigators found that price increases led to larger reductions in the fractions of heavy and fairly heavy adolescent drinkers than in the fraction of light drinkers. Most subsequent studies confirmed this finding (Cook and Moore 2001; Laixuthai and Chaloupka 1993; Young and Bielinska-Kwapisz 2006). Moreover, Laixuthai and Chaloupka (1993) reported that younger adolescent drinkers were more price sensitive than older adolescent drinkers, which is a particularly important finding because Cook and Moore (2001) provided evidence supporting the notion that drinking habits are formed at young ages. On the other hand, Birckmayer and Hemenway (1999) failed to find an association between beer tax and suicides among youth.