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Effects of beverage alcohol price and tax levels on drinking

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Alcohol taxation (iStock)

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

    Writer: | Last updated: February 22, 2011

    Citation: Wagenaar, Alexander C.; et al. "Effects of beverage alcohol price and tax levels on drinking: a meta-analysis of 1003 estimates from 112 studies," Addiction, February, 2009, Vol. 104, Issue 2, 179-190.DOI: 10.1111/j.1360-0443.2008.02438.x.

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    Analysis assignments

    Read the University of Florida study "Effects of Beverage Alcohol Price and Tax Levels on Drinking."

    1. Summarize the study in fewer than 40 words.
    2. Express the study's key term(s) in language a lay audience can understand.
    3. Evaluate the study's limitations. (For example: Do the results conflict with those of other reliable studies? Are there weaknesses in the study's data or research design?)

    Read the issue-related Boston Globe article titled "Spirits Run High Among Liquor Entrepreneurs."

    1. If you were to rewrite the article based on knowledge of the study, what key changes would you make?

    Newswriting assignments

    1. Write a lead (or headline or nut graph) based on the study.
    2. Spend 60 minutes exploring the issue by accessing sources of information other than the study. Write a lead (or headline or nut graph) based on the study but informed by the new information. Does the new information significantly change what one would write based on the study alone?
    3. Interview two sources with a stake in or knowledge of the issue. Be prepared to provide them with a short summary of the study in order to get their response to it. Write a 400-word article about the study incorporating material from the interviews.
    4. Spend additional time exploring the issue and then write a 1,200-word background article, focusing on major aspects of the issue.