Raising Alcohol Prices Doesn't Always Cut ConsumptionJanuary 4, 2006
Research Summary
Raising alcohol prices can be effective in lowering consumption, but not always, according to a new study from the University of Texas Prevention Research Center.The BBC reported Jan. 4 that researchers tracked alcohol sales and prices in Sweden from 1984 and 1994 and concluded that some price hikes actually led to more consumption because drinkers switched to cheaper brands. For example, when prices in Sweden were raised across the board by 10 percent, alcohol sales fell 1.7 percent. But when price increases were weighted towards more expensive drinks, overall alcohol sales rose 2.8 percent. When the price of the cheapest drinks was raised, sales fell 4.2 percent.
"Our results show that higher alcohol prices may and may not cause reductions in alcohol sales and related problems," said study author Paul Gruenewald. "The same tax may have different impacts in different markets and with different distributions of prices."
"Evidence does suggest it is not always sensible just to raise prices across the board," added Professor Martin Plant of the University of the West of England.
The study appears in the January 2006 issue of the journal Alcoholism: Clinical and Experimental Research.
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