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Is response to price equal for those with higher alcohol consumption?

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Abstract

Aims

To determine if taxation policies that increase the price of alcohol differentially reduce alcohol consumption for heavy drinkers in Australia.

Design

A two-part demand model for alcohol consumption is used to determine the price elasticity of alcohol. Quantile regression is used to determine the price elasticity estimates for various levels of consumption.

Setting

The study uses Australian data collected by the National Drug Strategy Household Survey for the years 2001, 2004 and 2007.

Measurements

Measures of individual annual alcohol consumption were derived from three waves of the National Drug Strategy Household Survey; alcohol prices were taken from market research reports.

Findings

For the overall population of drinkers, a 1 % increase in the price of alcohol was associated with a 0.96 % (95 % CI −0.35 %, −1.57 %) reduction in alcohol consumption. For those in the highest 10 % of drinkers by average amount consumed, a 1 % increase in the price of alcohol was associated with a 1.26 % (95 % CI 0.82 %, 1.70 %) reduction in consumption.

Conclusions

Within Australia, policies that increase the price of alcohol are about equally effective in relative terms for reducing alcohol consumption both for the general population and among those who drink heavily.

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Conflict of interest

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Authors and Affiliations

  1. Centre for Applied Health Economics, Griffith University, Logan Campus L03 2.15, Meadowbrook, QLD, 4131, Australia

    Joshua Byrnes

  2. National Drug and Alcohol Research Centre, University of New South Wales, Sydney, NSW, 2052, Australia

    Anthony Shakeshaft

  3. School of Population and Global Health, The University of Melbourne, Melbourne, VIC, Australia

    Dennis Petrie

  4. Hunter Medical Research Institute, Newcastle, NSW, 2305, Australia

    Christopher M. Doran

Authors
  1. Joshua Byrnes
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  2. Anthony Shakeshaft
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  3. Dennis Petrie
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  4. Christopher M. Doran
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Corresponding author

Correspondence to Joshua Byrnes.

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Byrnes, J., Shakeshaft, A., Petrie, D. et al. Is response to price equal for those with higher alcohol consumption?. Eur J Health Econ 17, 23–29 (2016). https://doi.org/10.1007/s10198-014-0651-z

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  • DOI: https://doi.org/10.1007/s10198-014-0651-z

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