Guide to community preventive services
The Effectiveness of Tax Policy Interventions for Reducing Excessive Alcohol Consumption and Related Harms

https://doi.org/10.1016/j.amepre.2009.11.005Get rights and content

Abstract

A systematic review of the literature to assess the effectiveness of alcohol tax policy interventions for reducing excessive alcohol consumption and related harms was conducted for the Guide to Community Preventive Services (Community Guide). Seventy-two papers or technical reports, which were published prior to July 2005, met specified quality criteria, and included evaluation outcomes relevant to public health (e.g., binge drinking, alcohol-related crash fatalities), were included in the final review. Nearly all studies, including those with different study designs, found that there was an inverse relationship between the tax or price of alcohol and indices of excessive drinking or alcohol-related health outcomes. Among studies restricted to underage populations, most found that increased taxes were also significantly associated with reduced consumption and alcohol-related harms. According to Community Guide rules of evidence, these results constitute strong evidence that raising alcohol excise taxes is an effective strategy for reducing excessive alcohol consumption and related harms. The impact of a potential tax increase is expected to be proportional to its magnitude and to be modified by such factors as disposable income and the demand elasticity for alcohol among various population groups.

Introduction

Excessive alcohol consumption is the third-leading actual cause of death in the U.S.,1 and each year it accounts for approximately 79,000 deaths and 2.3 million years of potential life lost (about 29 years of life lost per death; apps.nccd.cdc.gov/ardi/Homepage.aspx). Excessive alcohol consumption contributes to a variety of health and social problems, including unintentional injuries (e.g., injuries due to motor vehicle crashes); suicide; homicide; liver cirrhosis; gastrointestinal cancers; vandalism; and lost productivity.2 Alcohol consumption by underage drinkers also contributes to the three leading causes of death among adolescents (unintentional injuries, suicide, and homicide),3 and any underage drinking is considered excessive.

One of the fundamental laws of economics is that quantity demanded of a product is inversely related to its price (Law of Demand).4 Based on economic theory, therefore, increasing the price of alcohol would be expected to lower alcohol consumption. Alcohol taxes are promulgated primarily by federal and state governments, but can be instituted at the local or county level. Currently in the U.S., alcohol taxes are beverage-specific (i.e., they differ for beer, wine, and distilled spirits) and are usually “nominal” taxes, meaning they are based on a set rate per unit volume and are not adjusted for inflation (i.e., they generally remain stable as the cost of living increases). At the state and federal levels, inflation-adjusted alcohol taxes have declined considerably since the 1950s.5 Concordant with this decrease in the real value of these taxes from substantially higher levels, the inflation-adjusted price of alcohol decreased dramatically,6 reflecting the fact that changes in taxes are efficiently passed on through changes in prices.7 The goal of this systematic review is to assess the relationship between alcohol taxes or prices and public health outcomes related to excessive alcohol consumption to better inform decision makers about the potential utility of using tax policy as a means of improving those outcomes.

The intervention reviewed here is relevant to several objectives specified in Healthy People 2010, the disease prevention and health promotion agenda for the U.S. (Table 1).8 The objectives most directly relevant to this review are those that aim to reduce excessive alcohol consumption (26-11); reduce average annual alcohol consumption (26-12); and reduce key adverse consequences of excessive alcohol consumption (26-1, 26-2, and 26-5 through 26-8). In addition to these specific objectives, Healthy People 2010 notes that excessive alcohol consumption is also related to several other public health priorities such as cancer, educational achievement, injuries, risky sexual activity, and mental health; thus, a reduction in excessive alcohol consumption should help to meet some of the national goals in these areas as well.

Several authors9, 10, 11, 12 have suggested that increasing alcohol prices by raising alcohol excise taxes is among the most effective means of reducing excessive drinking and alcohol-related harms. Increasing alcohol excise taxes has been specifically recommended as a public health intervention by the IOM, Partnership for Prevention, the WHO, and the expert panel convened for the Surgeon General's Workshop on Drunk Driving.13, 14, 15, 16 These recommendations are based on studies14, 17, 18 showing that increased alcohol taxes are associated with decreased overall consumption, decreased youth consumption, decreased youth binge drinking, reduced alcohol-related motor-vehicle crashes, reduced mortality from liver cirrhosis, and reduced violence.

The current systematic review of the effects of alcohol taxes and prices on excessive alcohol consumption and related harms applies the stringent inclusion and assessment criteria of the Guide to Community Preventive Services (Community Guide).19 It was conducted under the oversight of the independent, nonfederal Task Force on Community Preventive Services (Task Force), with the support of USDHHS in collaboration with public and private partners. The CDC provides staff support to the Task Force for development of the Community Guide.

To support efforts to address important public health priorities, such as reducing excessive alcohol consumption and its related harms, the Task Force makes recommendations for practice and policies based on the results of Community Guide reviews such as this one. These recommendations are based primarily on the effectiveness of an intervention in improving important outcomes as determined by the systematic literature review process. In making its recommendations, the Task Force balances information about effectiveness with information about other potential benefits and harms of the intervention itself. The Task Force also considers the applicability of the intervention to various settings and populations in determining the scope of the recommendation. Finally, the Task Force reviews economic analyses of effective interventions, where available. Economic information is provided to assist with decision making, but it generally does not affect Task Force recommendations. See the Task Force–authored paper in this issue for recommendations regarding the effects of alcohol taxes and prices on excessive alcohol consumption and related harms.20

Section snippets

Evidence Acquisition

Community Guide methods for conducting systematic reviews and linking evidence to effectiveness are described elsewhere19 and on the Community Guide website (www.thecommunityguide.org/methods). In brief, for each Community Guide review topic, a systematic review development team representing diverse disciplines, backgrounds, and work settings conducts a review by (1) developing a conceptual approach to identify, organize, group, and select interventions for review; (2) developing a conceptual

Description of Included Studies

A total of 78 papers24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101 reported on studies that met the review inclusion criteria. Only some of the outcomes from one study83 were included because not all of its analyses met quality of

Summary

The reviewed studies provide consistent evidence that higher alcohol prices and alcohol taxes are associated with reductions in both excessive alcohol consumption and related, subsequent harms. Results were robust across different countries, time periods, study designs and analytic approaches, and outcomes. According to Community Guide rules of evidence,19 these studies provide strong evidence that raising alcohol taxes is an effective strategy for reducing excessive alcohol consumption and

References (110)

  • M. Duffy

    Advertising and the inter-product distribution of demand

    Eur Econ Rev

    (1987)
  • E. Leskinen et al.

    Forecasting the consumption of alcoholic beverages in Finland

    Eur Econ Rev

    (1976)
  • K. Whetten-Goldstein et al.

    Civil liability, criminal law, and other policies and alcohol-related motor vehicle fatalities in the U.S.: 1984–1995

    Accid Anal Prev

    (2000)
  • A.H. Mokdad et al.

    Actual causes of death in the U.S., 2000

    JAMA

    (2004)

  • Tenth Special Report to the U.S. Congress on alcohol and health

    (2000)

  • Web-based Injury Statistics Query and Reporting System (WISQARS)

  • A. Marshall

    Principles of economics

    (1920)

  • Alcohol polices in the U.S.: highlights from the 50 States

    (2000)
  • S. Olson et al.

    Alcohol in America: taking action to prevent abuse

    (1985)
  • D.J. Young et al.

    Alcohol taxes and beverage prices

    Natl Tax J

    (2002)

  • Healthy People 2010

    (2000)
  • T.F. Babor et al.

    Evidence-based alcohol policy in the Americas: strengths, weaknesses, and future challenges

    Pan Am J Public Health

    (2005)
  • D. Chisolm et al.

    Reducing the global burden of hazardous alcohol use: a comparative cost-effectiveness analysis

    J Stud Alcohol

    (2004)
  • H.D. Holder et al.

    Moving toward a common evidence base for alcohol and other drug prevention policy

  • T.L. Toomey et al.

    Policy options for prevention: the case of alcohol

    J Public Health Policy

    (1999)
  • T.F. Babor et al.

    Alcohol: no ordinary commodity: research and public policy

    (2003)
  • F.J. Chaloupka et al.

    The effects of price on alcohol consumption and alcohol-related problems

    Alcohol Res Health

    (2002)

  • Reducing underage drinking: a collective responsibility

    (2004)

  • Surgeon General's workshop on drunk driving: proceedings

    (1989)
  • P.J. Cook et al.

    The economics of alcohol abuse and alcohol-control policies

    Health Aff (Millwood)

    (2002)
  • P.J. Cook

    Paying the tab: the costs and benefits of alcohol control

    (2007)

  • Increasing alcoholic beverage taxes is recommended to reduce excessive alcohol consumption and related harms

    Am J Prev Med

    (2010)
  • P.J. Cook et al.

    [Discussion of] “Alcool, alcoolisme, alcoolisation” by S. Ledermann

    Alcohol Health Res World

    (1995)
  • O.-J. Skog

    The collectivity of drinking cultures: a theory of the distribution of alcohol consumption

    Br J Addict

    (1985)
  • P.J. Cook et al.

    The effect of liquor taxes on heavy drinking

    Bell J Econ

    (1982)
  • F.J. Chaloupka et al.

    Alcohol-control policies and motor-vehicle fatalities

    J Legal Stud

    (1993)
  • D. Blake et al.

    The demand for alcohol in the United Kingdom

    Appl Econ

    (1997)
  • D. Heien et al.

    Stress, ethnic, and distribution factors in a dichotomous response model of alcohol abuse

    J Stud Alcohol

    (1987)
  • P.J. Cook et al.

    Are alcohol excise taxes good for us? Short- and long-term effects on mortality rates. Working Paper No. 11138

    (2005)
  • T.R. Beard et al.

    Border-crossing sales, tax avoidance, and state tax policies: an application to alcohol

    South Econ J

    (1997)
  • B.H. Baltagi et al.

    Quasi-experimental price elasticity of liquor demand in the U.S.: 1960–83

    Am J Agric Econ

    (1990)
  • J.L. Simon

    Price elasticity of liquor in the US and a simple method of determination

    Econometrica

    (1966)
  • S.L. Decker et al.

    Cigarettes and alcohol: substitutes or complements. Working Paper No. 7535

    (2000)
  • D. Levy et al.

    New evidence on controlling alcohol use through price

    J Stud Alcohol

    (1983)
  • J.A. Johnson et al.

    Socioeconomic determinants of the consumption of alcoholic beverages

    Appl Econ

    (1974)
  • R.K. Goel et al.

    The interdependence of cigarette and liquor demand

    South Econ J

    (1995)
  • J.F. Hoadley et al.

    The effect of alcohol beverage restriction on consumption: a 25-year longitudinal analysis

    Am J Drug Alcohol Abuse

    (1984)
  • B. Lee et al.

    Advertising and the US market demand for beer

    Appl Econ

    (1992)
  • S.I. Ornstein et al.

    Alcohol control laws and the consumption of distilled spirits and beer

    J Consum Res

    (1985)
  • H. Saffer et al.

    Drinking age laws and highway mortality rates: cause and effect

    Econ Inq

    (1987)

    • Cited by (0)

    View full text
    Published by Elsevier Inc.