The Effectiveness of Tax Policy Interventions for Reducing Excessive Alcohol Consumption and Related Harms

Abstract

A systematic review of the literature to assess the effectiveness of alcohol tax policy interventions for reducing excessive alcohol consumption and related harms was conducted for the Guide to Community Preventive Services (Community Guide). Seventy-two papers or technical reports, which were published prior to July 2005, met specifıed quality criteria, and included evaluation outcomes relevant to public health (e.g., binge drinking, alcohol-related crash fatalities), were included in the fınal review. Nearly all studies, including those with different study designs, found that there was an inverse relationship between the tax or price of alcohol and indices of excessive drinking or alcohol-related health outcomes. Among studies restricted to underage populations, most found that increased taxes were also signifıcantly associated with reduced consumption and alcohol-related harms. According to Community Guide rules of evidence, these results constitute strong evidence that raising alcohol excise taxes is an effective strategy for reducing excessive alcohol consumption and related harms. The impact of a potential tax increase is expected to be proportional to its magnitude and to be modifıed by such factors as disposable income and the demand elasticity for alcohol among various population groups.

Optimal alcohol taxation: Simulation results for Estonia

“…Price elasticity of alcohol purchases by tourists was held constant, while it was allowed to vary from -0.4 to -2.0 in sensitivity analysis. There is empirical evidence that the quantity of criminal offenses or misdemeanors committed is responsive to alcohol price (Elder et al, 2010;Wagenaar et al, 2010). In this paper, the elasticity of both misdemeanors and criminal offenses is suggested to lie within the same range as alcohol consumption.…”

“…Analogously to Parry et al (2009) a range from -0.4 to -1.0 was chosen for price elasticity of alcohol demand by locals. Recently this choice has been supported by a review conducted by Elder et al (2010). Price elasticity of alcohol purchases by tourists was held constant, while it was allowed to vary from -0.4 to -2.0 in sensitivity analysis.…”

Heavy episodic drinking and deliberate self-harm in young people: a longitudinal cohort study

“…Young people tend to be more price sensitive, and thus with a price increase they are likely to buy and drink less, and vice versa; with a price decrease they are likely to buy and drink more (44).…”

Tackling Public Health Challenge through Policy: Alcohol Consumption and Related Harm in UK

“…Research evidence on the basis of economic theories reveals that rising price is a successful method of decreasing harms at the population level due to alcohol consumption [11]. Elder [12] states that in the US, increase tax on alcohol lead to higher alcohol price; yet same is not true for the UK market where due to high taxes, very low prices in discount rate is seen in the off-trade sector, even to the point that few items are sold in supermarkets below the level of cost as loss leader products. It is; however, important to understand that tax policies that are efficient and effective in one country context may result in different outcomes in other countries" context.…”