IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v29y2020i12p1637-1656.html
   My bibliography  Save this article

The early impact of Scotland's minimum unit pricing policy on alcohol prices and sales

Author

Listed:
  • Irena Palamani Xhurxhi

Abstract

In May 2018, Scotland became the first country in the world to enforce a minimum unit pricing (MUP) of 50 pence ($0.65; €0.55) on alcoholic beverages as a measure to control alcohol consumption and alcohol‐related harms. This study presents early estimates of the impact of MUP on three outcomes: average price per unit (8 gr/10 ml) of alcohol, liters of alcohol sold per adult, and liters of alcohol sold per adult drinker, in three different settings: off‐premise, on‐premise, and both combined. Using yearly alcohol price and sales data from 2011 to 2019, I find that the average price per unit of alcohol has significantly risen post‐MUP across all beverage categories (beer, spirits, wine, cider, and alcohol‐all types), whereas liters of alcohol sold per adult and per adult drinker have significantly reduced for beer, spirits, cider, and alcohol‐all types. For all outcomes, the impact of MUP on off‐premise alcohol prices and sales is more pronounced than under the combined case, while no significant effects are found on‐premise. These results are robust to model specification and to the addition of various control variables. Falsification tests changing the timing of the policy were performed and no significant results were found.

Suggested Citation

  • Irena Palamani Xhurxhi, 2020. "The early impact of Scotland's minimum unit pricing policy on alcohol prices and sales," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1637-1656, December.
    • Handle: RePEc:wly:hlthec:v:29:y:2020:i:12:p:1637-1656
    DOI: 10.1002/hec.4156
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.4156
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.4156?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    2. Stockwell, T. & Zhao, J. & Martin, G. & Macdonald, S. & Vallance, K. & Treno, A. & Ponicki, W. & Tu, A. & Buxton, J., 2013. "Minimum alcohol prices and outlet densities in British Columbia, Canada: Estimated impacts on alcohol-attributable hospital admissions," American Journal of Public Health, American Public Health Association, vol. 103(11), pages 2014-2020.
    3. Stephen G. Donald & Kevin Lang, 2007. "Inference with Difference-in-Differences and Other Panel Data," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 221-233, May.
    4. Jonathan Gruber & James M. Poterba, 1993. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," NBER Working Papers 4435, National Bureau of Economic Research, Inc.
    5. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    6. Petra S Meier & John Holmes & Colin Angus & Abdallah K Ally & Yang Meng & Alan Brennan, 2016. "Estimated Effects of Different Alcohol Taxation and Price Policies on Health Inequalities: A Mathematical Modelling Study," PLOS Medicine, Public Library of Science, vol. 13(2), pages 1-27, February.
    7. Anurag Sharma & Brian Vandenberg & Bruce Hollingsworth, 2014. "Minimum Pricing of Alcohol versus Volumetric Taxation: Which Policy Will Reduce Heavy Consumption without Adversely Affecting Light and Moderate Consumers?," PLOS ONE, Public Library of Science, vol. 9(1), pages 1-13, January.
    8. Jonathan Gruber & James Poterba, 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 701-733.
    9. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    10. Finkelstein, Amy, 2002. "The effect of tax subsidies to employer-provided supplementary health insurance: evidence from Canada," Journal of Public Economics, Elsevier, vol. 84(3), pages 305-339, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 7th December 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-12-07 12:00:03

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Farasat A. S. Bokhari & Ratula Chakraborty & Paul W. Dobson & Marcello Morciano, 2024. "Lockdown drinking: The sobering effect of price controls in a pandemic," Economic Inquiry, Western Economic Association International, vol. 62(4), pages 1539-1557, October.
    2. Marco Francesconi & Jonathan James, 2022. "Alcohol Price Floors and Externalities: The Case of Fatal Road Crashes," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(4), pages 1118-1156, September.
    3. Bokhari, Farasat A.S. & Dobson, Paul W. & Morciano, Marcello & Suhrcke, Marc, 2023. "Banning volume discounts to curb excessive consumption: A cautionary tale," European Economic Review, Elsevier, vol. 156(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthew D. Webb, 2023. "Reworking wild bootstrap‐based inference for clustered errors," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 839-858, August.
    2. Kelly Bedard & Peter J. Kuhn, 2013. "Making Nutritional Information Digestible: Effects of a Receipt-Based Intervention on Restaurant Purchases," NBER Working Papers 19654, National Bureau of Economic Research, Inc.
    3. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    4. Vikström, Johan, 2009. "Cluster sample inference using sensitivity analysis: the case with few groups," Working Paper Series 2009:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Roth, Jonathan & Sant’Anna, Pedro H.C. & Bilinski, Alyssa & Poe, John, 2023. "What’s trending in difference-in-differences? A synthesis of the recent econometrics literature," Journal of Econometrics, Elsevier, vol. 235(2), pages 2218-2244.
    6. Lechner, Michael, 2011. "The Estimation of Causal Effects by Difference-in-Difference Methods," Foundations and Trends(R) in Econometrics, now publishers, vol. 4(3), pages 165-224, November.
    7. Tracy L. Regan & Gulcin Gumus, 2006. "Tax Incentives as a Solution to the Uninsured: Evidence from the Self-Employed," Working Papers 0709, University of Miami, Department of Economics, revised Oct 2007.
    8. Bedard, Kelly & Kuhn, Peter, 2015. "Micro-marketing healthier choices: Effects of personalized ordering suggestions on restaurant purchases," Journal of Health Economics, Elsevier, vol. 39(C), pages 106-122.
    9. Li, Sujuan & Liu, Jiaguo & Kong, Yudan, 2021. "Pilot free trade zones and Chinese port-listed companies performance: An empirical research based on quasi-natural experiment," Transport Policy, Elsevier, vol. 111(C), pages 125-137.
    10. David Roodman & James G. MacKinnon & Morten Ørregaard Nielsen & Matthew D. Webb, 2019. "Fast and wild: Bootstrap inference in Stata using boottest," Stata Journal, StataCorp LP, vol. 19(1), pages 4-60, March.
    11. Velamuri, Malathi, 2009. "Taxes, Health Insurance and Women’s Self-Employment," MPRA Paper 15731, University Library of Munich, Germany.
    12. Michael Smart & Mark Stabile, 2005. "Tax credits, insurance, and the use of medical care," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 345-365, May.
    13. James G. MacKinnon, 2019. "How cluster‐robust inference is changing applied econometrics," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(3), pages 851-881, August.
    14. Laetitia Lebihan, 2023. "Minimum wages and health: evidence from European countries," International Journal of Health Economics and Management, Springer, vol. 23(1), pages 85-107, March.
    15. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    16. Dale Belman & Paul Wolfson & Kritkorn Nawakitphaitoon, 2015. "Who Is Affected by the Minimum Wage?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 582-621, October.
    17. Nadler, Carl & Allegretto, Sylvia & Godoey, Anna & Reich, Michael, 2019. "Are Local Minimum Wages Too High? Working Paper #102-19," Institute for Research on Labor and Employment, Working Paper Series qt7xt8716f, Institute of Industrial Relations, UC Berkeley.
    18. Stavrunova, Olena & Yerokhin, Oleg, 2014. "Tax incentives and the demand for private health insurance," Journal of Health Economics, Elsevier, vol. 34(C), pages 121-130.
    19. Athey, Susan & Imbens, Guido W., 2022. "Design-based analysis in Difference-In-Differences settings with staggered adoption," Journal of Econometrics, Elsevier, vol. 226(1), pages 62-79.
    20. Belman, Dale. & Wolfson, Paul J., 2016. "What does the minimum wage do in developing countries? : A review of studies and methodologies," ILO Working Papers 994893283402676, International Labour Organization.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:29:y:2020:i:12:p:1637-1656. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.