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How Prices and Policies Impact Alcohol Consumption

How Prices and Policies Impact Alcohol Consumption

November 13 | By Rachael

For decades, researchers and economists have been analyzing the severity of the problem of alcohol use by teenagers and young adults. While examining the measures, special attention is given to how prices of alcoholic beverages can impact consumption. Numerous studies have also determined the impacts of price on various outcomes related to alcohol consumption, such as fatal and nonfatal vehicle crashes and other injuries, violence, liver cirrhosis, crime and alcohol-related mortality.

In several instances, it has been seen that price change of alcoholic beverages prompted a decrease in drinking as well as reduction of the negative outcomes of alcohol use and abuse. This explains the central law of the downward sloping demand curve of economics, where an increase in the price of a product leads to decrease in its demand. As prices of alcohol can be controlled through excise tax strategies, the government can adopt and implement effective policies to combat the growing alcohol problem.

Effects of price on consequences of alcohol abuse

Apart from the difficulty in assessing the extent of legal production that is brought into the country or taken out, there are also numerous challenges prohibiting officials from estimating the accuracy. These include illegal production, fraudulent transportation activities and slippages.

The researchers have analyzed the impact of alcohol excise taxes on youth fatality rates arising from motor vehicle crashes. A research conducted by Saffer and Grossman concluded that increase in alcohol taxes would significantly reduce vehicle fatalities among the youth. Since minimum legal drinking age (MLDAs) and drunk-driving laws also play important roles, the investigators discussed effects of those as well.

Another study used data from 1989, 1990, and 1991 Core Alcohol and Drug Surveys of College Students and assessed the effects of changes in alcoholic beverage prices in the country on violence in college campuses. The study comprised nearly 120,000 college students from approximately 200 colleges and universities across the United States. They were measured based on four indicators of violence:

  • Causing trouble with the police, residence hall or college authorities
  • Destroying property or pulling a fire alarm
  • Fighting or initiating an argument
  • Sexually exploiting a person or being a victim

The occurrence of each of these acts of violence was inversely related to the price of beer across the country. For instance, a 10 percent price increase could impact violence in the following ways:

  • The proportion of students who get into trouble with the police or college authorities would decline from 12.3 percent to 11.7 percent.
  • The proportion of students involved in causing damage to public property would get reduced from 7.5 percent to 7.1 percent.
  • The percentage of students engaging in verbal or physical fights would fall from 31.2 percent to 30.2 percent.
  • The proportion of students involved in sexual misconduct would decline from 14.3 percent to 13.8 percent.
  • The number of students involved in violence every year would be reduced by approximately 200,000 or by 4 percent.

Policies affecting price of alcohol and its consumption

A major strategy to prevent teenagers and young adults from drinking too much and getting addicted is by increasing the minimum legal drinking age. This trend of raising MLDA started in 1976 and further compelled other states to raise the MLDA to 21 years. Several states have also adopted stringent laws like imposing fines for possession of alcohol, underage drinking and driving, and driving with measurable blood alcohol concentrations (BACs).

Another strategy, not much utilized by policy makers, is the increase in the monetary price of alcohol by raising taxes on alcoholic beverages. During the past few years, Federal, State, and local taxes on alcohol have only been raised modestly with the aim of increasing revenues rather than encouraging the youth in practicing abstinence.

Living an alcohol-free life

Alcohol destroys relationships, academic performance, career, social circle and financial stability. It is also associated with multiple health disorders, such as different types of cancers, liver damage, anemia, cardiovascular problems and pancreatitis, as well as mental health issues like depression and anxiety.

If you or your loved one is struggling to quit drinking, contact the Colorado Alcohol Addiction Help for guidance on the best facilities offering customized alcohol treatment in Colorado. Call at our 24/7 helpline 866-592-9261 or chat online to know about credible alcohol addiction treatment centers in Colorado offering evidence-based treatment modalities.

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