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The Cost of Binge Drinking

76 Pages Posted: 21 Feb 2015  

Marco Francesconi

University of Essex; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Jonathan James

University of Bath

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Abstract

We estimate the effect of binge drinking on accident and emergency attendances, road accidents, arrests, and the number of police officers on duty using a variety of unique data from Britain and a two-sample minimum distance estimation procedure. Our estimates, which reveal sizeable effects of bingeing on all outcomes, are then used to monetize the short-term externalities of binge drinking. We find that these externalities are on average £4.9 billion per year ($7 billion), about £80 for each man, woman, and child living in the UK. The price that internalizes this externality is equivalent to an additional 9p per alcoholic unit, implying a 20% increase with respect to the current average price.

Keywords: alcohol, health, road accidents, arrests, externalities

JEL Classification: I12, I18, K42

Suggested Citation

Francesconi, Marco and James, Jonathan, The Cost of Binge Drinking. IZA Discussion Paper No. 8849. Available at SSRN: https://ssrn.com/abstract=2568045

Marco Francesconi (Contact Author)

University of Essex ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 1206 873 534 (Phone)
+44 1206 873 151 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Jonathan James

University of Bath

Claverton Down
Bath, BA2 7AY
United Kingdom

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