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What happens to drinking when alcohol policy changes? A review of five natural experiments for alcohol taxes, prices, and availability

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  • Jon P. Nelson

    (Pennsylvania State University)

  • Amy D. McNall

Abstract

Natural experiments are an important alternative to observational and econometric studies. This paper provides a review of results from empirical studies of alcohol policy interventions in five countries: Denmark, Finland, Hong Kong, Sweden, and Switzerland. Major policy changes were removal of quotas on travelers’ tax-free imports and reductions in alcohol taxes. A total of 29 primary articles are reviewed, which contain 35 sets of results for alcohol consumption by various subpopulations and time periods. For each country, the review summarizes and examines: (1) history of tax/quota policy interventions and price changes; (2) graphical trends for alcohol consumption and liver disease mortality; and (3) empirical results for policy effects on alcohol consumption and drinking patterns. We also compare cross-country results for three select outcomes—binge drinking, alcohol consumption by youth and young adults, and heavy consumption by older adults. Overall, we find a lack of consistent results for consumption both within- and across-countries, with a general finding that alcohol tax interventions had selective, rather than broad, impacts on subpopulations and drinking patterns. Policy implications of these findings are discussed.

Suggested Citation

  • Jon P. Nelson & Amy D. McNall, 2017. "What happens to drinking when alcohol policy changes? A review of five natural experiments for alcohol taxes, prices, and availability," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(4), pages 417-434, May.
    • Handle: RePEc:spr:eujhec:v:18:y:2017:i:4:d:10.1007_s10198-016-0795-0
    DOI: 10.1007/s10198-016-0795-0
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    References listed on IDEAS

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    1. Lorenz Kueng & Evgeny Yakovlev, 2021. "The Long-Run Effects of a Public Policy on Alcohol Tastes and Mortality," American Economic Journal: Economic Policy, American Economic Association, vol. 13(1), pages 294-328, February.
    2. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    3. Dee, Thomas S., 1999. "The complementarity of teen smoking and drinking," Journal of Health Economics, Elsevier, vol. 18(6), pages 769-793, December.
    4. Cook, Philip J. & Durrance, Christine Piette, 2013. "The virtuous tax: Lifesaving and crime-prevention effects of the 1991 federal alcohol-tax increase," Journal of Health Economics, Elsevier, vol. 32(1), pages 261-267.
    5. Nelson, Jon P., 2014. "Estimating the price elasticity of beer: Meta-analysis of data with heterogeneity, dependence, and publication bias," Journal of Health Economics, Elsevier, vol. 33(C), pages 180-187.
    6. Wagenaar, A.C. & Tobler, A.L. & Komro, K.A., 2010. "Effects of alcohol tax and price policies on morbidity and mortality: A systematic review," American Journal of Public Health, American Public Health Association, vol. 100(11), pages 2270-2278.
    7. Jon Nelson, 2013. "Meta-analysis of alcohol price and income elasticities – with corrections for publication bias," Health Economics Review, Springer, vol. 3(1), pages 1-10, December.
    8. Nelson, Jon P. & McNall, Amy D., 2016. "Alcohol prices, taxes, and alcohol-related harms: A critical review of natural experiments in alcohol policy for nine countries," Health Policy, Elsevier, vol. 120(3), pages 264-272.
    9. Michael T. French & Ioana Popovici, 2011. "That instrument is lousy! In search of agreement when using instrumental variables estimation in substance use research," Health Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 127-146, February.
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    Cited by:

    1. Datta Gupta, Nabanita & Nilsson, Anton, 2020. "Legal Drinking, Injury and Harm: Evidence from the Introduction and Modifications of Age Limits in Denmark," IZA Discussion Papers 13401, Institute of Labor Economics (IZA).
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    3. Nelson Jon P. & Moran John R., 2020. "Effects of Alcohol Taxation on Prices: A Systematic Review and Meta-Analysis of Pass-Through Rates," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-21, January.
    4. Jan Bentzen & Valdemar Smith, 2020. "Are Tax-Free Wine Prices Attractive for Consumers? Empirical Evidence from Norway," International Business Research, Canadian Center of Science and Education, vol. 13(7), pages 130-130, July.

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    More about this item

    Keywords

    Alcohol policy; Alcohol taxes; Determinants of drinking; Drinking patterns;
    All these keywords.

    JEL classification:

    • I00 - Health, Education, and Welfare - - General - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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