The Long-Run Effects of a Public Policy on Alcohol Tastes and Mortality

Abstract

We study the long-run effects of Russia’s anti-alcohol campaign, which dramatically altered the relative supply of hard and light alcohol in the late 1980s. We find that this policy shifted young men’s long-run preferences from hard to light alcohol decades later, and we estimate the age at which consumers form their tastes. We show that the large beer market expansion in the late 1990s had similar effects on young consumers’ tastes, while older consumers’ tastes remained largely unchanged. We then link these long-run changes in alcohol consumption patterns to changes in male mortality. The shift from hard to light alcohol reduced incidences of binge drinking substantially, leading to fewer alcohol-related deaths. We conclude that the resulting large cohort differences in current alcohol consumption shares explain a significant part of the recent decrease in male mortality. Simulations suggest that mortality will continue to decrease by another 23 percent over the next 20 years due to persistent changes in consumer tastes. Program impact evaluations that focus only on contemporaneous effects can therefore severely underestimate the total effect of such public policies that change preferences for goods. (JEL D12, H25, H31, I12, I18, L66, P36)

Alcoholism and mortality in Eastern Europe

“…Using microdata on Russian men, the authors show that even when levels of alcohol intake are taken into account, those individuals who prefer drinking vodka have a significantly higher risk of death compared with those who prefer drinking beer (or wine). The study also shows that the substitution of vodka drinkers to beer drinkers resulted in a 15% decrease in male mortality in ten years [13].…”

“…As beer is a relatively safer drink compared to hard spirits, this shift led to lower rates of excessive and hazardous drinking, as well a decrease in mortality rates. One study provides additional evidence of the substitution effect of beer and spirits [13].…”

“…This, together with a lower regulatory burden imposed on the beer industry in many countries, resulted in its rapid expansion during the 2000s. As a consequence, hard liquor consumption was substituted by beer consumption [13]. As beer is a relatively safer drink compared to hard spirits, this shift led to lower rates of excessive and hazardous drinking, as well a decrease in mortality rates.…”

“…One study highlights that the expansion of the beer industry that occurred in Russia during the 1990s and 2000s affected mainly young adults who were just beginning to consume alcohol. This generation of younger people switched to consuming beer instead of spirits, whereas the older generation, who had already developed strong habits toward consuming hard alcohol, continued to drink spirits [13].…”

“…For example, if an individual consumes vodka during their teens, they are much more likely to prefer drinking vodka later in life. If beer was their preference during their teenage years, then they will also be more likely to prefer drinking beer decades later [13].…”