Alcohol, taxes and public health

Do higher taxes on alcohol reduce a wide range of social ills? ACSH staffers were skeptical of a study last month purporting to show just that, reasoning that drinking is fine in moderation and alcohol abusers would buy it at nearly any price. One of our trustees, Nigel Bark, M.D., an associate professor of clinical psychiatry at Albert Einstein College of Medicine, disagrees. In an email to us, Dr. Bark said our Dispatch-es are essential reading that he enjoys very much, but ...

However I am (again) bothered by the discussion of the article on the ill effects of alcohol in ACSH Dispatch of Sept. 27, because I see the evidence in the literature for over 30 years as overwhelmingly in support of an inverse relationship between the cost (basically taxation) of alcohol and alcohol related morbidity and mortality. .... [T]he fact that one person with severe alcoholism does not change his behavior in response to a price increase of alcohol has no bearing on the effect of a price increase on a whole population in which the proportion with severe alcoholism is very small.The findings of the article in question are not new but very well established. The relationship between cost of alcohol and not only alcohol consumption but also alcoholism has been very well and repeatedly established in studies for more than three decades.

Indeed, there is evidence of the beneficial effects on public health of increasing the price of alcohol over nearly three centuries. When the first tax was put on gin in 18th century England there was a significant improvement in public health, mainly in the cities, and including in women and children. Since then rates of alcoholism have fluctuated with the cost of alcohol. In Britain in the past 50 years, the relative price of alcohol has gone down over 100 percent and the consumption of alcohol has almost doubled with significant increases in alcohol related mortality, cirrhosis and binge drinking. There is consistent evidence that raising the price of alcohol lowers alcohol-related traffic accidents, workplace injuries, some types of violent crime and spouse and child abuse.

I think the science on alcohol is very clear: Raising taxes on alcohol is by far the most effective way of reducing the mortality and morbidity associated with drinking alcohol. I think you can argue with the philosophy but not with the science.

We think Trevor Butterworth would beg to differ with that last line, though he has a detailed criticism of the meta-analysis on, arguing in part that research in this area is systemically biased because it works off absolute prices and not prices relative to societal wealth. He also points out that there are few differences in drunk-driving deaths between Maryland and Virginia, despite Virginia s significantly higher alcohol taxes.