What Happens to Drinking and Harms When Alcohol Policy Changes? A Systematic Review of Five Natural Experiments for Alcohol Taxes, Prices, and Availability

Abstract

Natural experiments are an important alternative to observational and econometric studies. This paper provides a systematic review of empirical results from primary studies of alcohol policy interventions in five countries: Denmark, Finland, Hong Kong, Sweden, and Switzerland. Major policy changes were removal of limits on travellers’ tax-free imports and substantial alcohol tax reductions. A total of 55 articles are reviewed, which contain 78 results for alcohol consumption by various subpopulations, imports of alcohol, and evidence for alcohol-related acute- and chronic-harms. For each country, the review summarizes and examines: (1) history of policy interventions; (2) graphical trends for alcohol consumption and liver disease mortality; (3) empirical results for policy effects on alcohol consumption by subpopulations; and (4) empirical results for policy effects on alcohol-related harms. We also compare cross-country results for several outcomes, including binge drinking, alcohol consumption by youth and young adults, acute harms (assaults, drink-driving), and chronic harms (liver disease mortality, chronic hospitalizations). Overall, the review finds a lack of consistent results for consumption and harms both within- and across-countries, with a general finding that tax policy interventions had selective, rather than broad, impacts on subpopulations, drinking patterns, and alcohol-related harms. Policy implications of these findings are discussed.

Keywords: alcohol policy, alcohol taxes, binge drinking, natural experiments

JEL Classification: I12, I18, I10