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
Date Written: March 8, 2013
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: Suggested Citation