Effects of beverage alcohol price and tax levels on drinking
State and federal taxation of alcoholic beverages has long been a charged issue among voters. Claims of overly paternalistic policy on one side are met with arguments that alcohol taxes are a deterrent to antisocial behavior.
A 2009 metastudy by researchers at the University of Florida published in the journal Addiction, “Effects of Beverage Alcohol Price and Tax Levels on Drinking,” examines the impact of beverage price on drinking habits. The authors analyzed more than 1,000 estimates from 112 previous studies on the correlation between beverage price and either sales figures or self-reported drinking consumption.
The results of this meta-study concluded that:
- Of the 24 aggregated studies (not broken down by beverage type), 19 showed that raising prices decreased alcohol consumption. Four studies were inconclusive, and one study showed an increase in consumption as prices rose.
- Of the 47 studies focusing specifically on beer consumption, only five studies showed consumption increasing even as prices went up.
- All but five of 32 studies showed wine drinking decreasing as prices rose, and likewise all but six of 45 studies showed consumption of spirits declining with price increases.
- Eight of 10 studies found significant decreases in heavy drinking as prices went higher.
The authors conclude that the correlation between increased prices and taxes on alcoholic beverages and their decreased consumption is both statistically and practically significant. These findings indicate that public policies seeking to raise the price of alcohol may be an effective means to reduce drinking.
Tags: consumer affairs, metastudy
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Read the University of Florida study "Effects of Beverage Alcohol Price and Tax Levels on Drinking."
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Read the issue-related Boston Globe article titled "Spirits Run High Among Liquor Entrepreneurs."
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