Does Heavy Drinking by Adults Respond to Higher Alcohol Prices and Taxes? A Survey and Assessment

Economic Analysis and Policy, Forthcoming

30 Pages Posted: 10 Mar 2013

See all articles by Jon P. Nelson

Jon P. Nelson

Pennsylvania State University - College of the Liberal Arts - Department of Economic

Date Written: March 8, 2013

Abstract

Higher alcohol prices and taxes are frequently proposed as a policy tool to deal with abusive consumption and adverse alcohol-related outcomes. Its success depends on price responsiveness of drinkers, especially heavy drinkers. This survey examines empirical studies of the price responsiveness of heavy-drinking adults. Additionally, the survey examines the relationship between alcohol prices and mortality due to liver cirrhosis. A review is conducted of 19 individual-based studies that examine price responses by heavy-drinking adults and nine studies of prices and cirrhosis mortality. The review finds only two studies of heavy drinking with a significant and substantial negative price response. For cirrhosis mortality, only two studies find a significant negative price response. Overall, the role of price and taxes as a significant deterrent to heavy drinking by adults is uncertain.

Keywords: alcohol prices, alcohol taxes, cirrhosis mortality, adult drinking

JEL Classification: I12, I18, H20

Suggested Citation

Nelson, Jon P., Does Heavy Drinking by Adults Respond to Higher Alcohol Prices and Taxes? A Survey and Assessment (March 8, 2013). Economic Analysis and Policy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2230649

Jon P. Nelson (Contact Author)

Pennsylvania State University - College of the Liberal Arts - Department of Economic ( email )

Kern Graduate Building
University Park, PA 16802-3306
United States
814-237-0157 (Phone)

HOME PAGE: http://econ.la.psu.edu/people/jpn

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