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Binge Drinking, Alcohol Prices, And Alcohol Taxes

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  • Nelson, Jon P.

Abstract

Background - Heavy episodic (“binge”) drinking of alcohol has serious public health implications, especially for youth and young adults. However, previous reviews have failed to address in a comprehensive manner the effects of alcohol prices and taxes on binge drinking by gender and age group. Methods: A systematic review is performed for possible effects of alcohol prices and taxes on binge drinking for three age groups. Outcomes examined include binge participation, intensity and frequency. Fifty-six relevant economic studies were recovered, with results distributed equally among three age groups. Also recovered were five natural experiments for tax reductions and six field studies, which increased the country coverage. Criteria for inclusion/exclusion and potential sources of bias are discussed, including adequacy of price and tax data. Price-binge relationships are judged using a 95% confidence interval (p ≤ 0.05) for statistical significance. Results: More than half of economic studies report insignificant results for prices or taxes (30 null of 56 studies), with mixed results in 13 studies and significant results in only 13 studies. Null results are equally distributed across age groups, but some mixed results reflect different outcomes by gender. Prices or taxes are insignificant for 11 of 16 samples for men and 7 of 14 samples for women. Four of five natural experiments report null results for country-level tax cuts. Six field studies examine a variety of pricing methods and drink specials, but results are mixed. Conclusions: A large body of evidence now indicates that binge drinkers are not highly-responsive to increased prices or taxes, and may not respond at all. Nonresponsiveness holds generally for younger and older drinkers and for male and female binge drinkers alike. Increased alcohol prices or taxes are unlikely to be effective as a means to reduce binge drinking, regardless of gender or age group.

Suggested Citation

  • Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
  • Handle: RePEc:ags:aawewp:164652
    DOI: 10.22004/ag.econ.164652
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    File URL: https://ageconsearch.umn.edu/record/164652/files/AAWE_WP146.pdf
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    1. Bird,Richard M., 2015. "Tobacco and alcohol excise taxes for improving public health and revenue outcomes : marrying sin and virtue ?," Policy Research Working Paper Series 7500, The World Bank.

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    Demand and Price Analysis; Health Economics and Policy;

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