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The effects of prices on alcohol use and its consequences.

Xu X, Chaloupka FJ - Alcohol Res Health (2011)

Bottom Line: Federal and State excise taxes have increased only rarely and, when adjusted for inflation, have declined significantly over the years, as have overall prices for alcoholic beverages.Yet studies examining the effects of increases of monetary prices (e.g., through raising taxes) on alcohol consumption and a wide range of related behavioral and health problems have demonstrated that price increases for alcoholic beverages lead to reduced alcohol consumption, both in the general population and in certain high-risk populations, such as heavier drinkers or adolescents and young adults.These effects seem to be more pronounced in the long run than in the short run.

View Article: PubMed Central - PubMed

Affiliation: Health Policy Center at the Institute of Health Research and Policy, University of Illinois at Chicago, Chicago, Illinois.

ABSTRACT
Over the past three decades, economists and others have devoted considerable effort to assessing the impact of alcoholic-beverage taxes and prices on alcohol consumption and its related adverse consequences. Federal and State excise taxes have increased only rarely and, when adjusted for inflation, have declined significantly over the years, as have overall prices for alcoholic beverages. Yet studies examining the effects of increases of monetary prices (e.g., through raising taxes) on alcohol consumption and a wide range of related behavioral and health problems have demonstrated that price increases for alcoholic beverages lead to reduced alcohol consumption, both in the general population and in certain high-risk populations, such as heavier drinkers or adolescents and young adults. These effects seem to be more pronounced in the long run than in the short run. Likewise, price increases can help reduce the risk for adverse consequences of alcohol consumption and abuse, including drinking and driving, alcohol-involved crimes, liver cirrhosis and other alcohol-related mortality, risky sexual behavior and its consequences, and poor school performance among youth. All of these findings indicate that increases in alcoholic-beverage taxes could be a highly effective option for reducing alcohol abuse and its consequences.

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Related in: MedlinePlus

Average real State taxes on beer tax 1951–2009.SOURCE: Brewers Almanac 2009: Beer Institute.NOTE: The estimates are based on the mathematic average of beer taxes of 50 States and the District of Columbia. Inflation-adjusted values are based on the All Urban Consumers consumer price index series.
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f2-arh-34-2-236: Average real State taxes on beer tax 1951–2009.SOURCE: Brewers Almanac 2009: Beer Institute.NOTE: The estimates are based on the mathematic average of beer taxes of 50 States and the District of Columbia. Inflation-adjusted values are based on the All Urban Consumers consumer price index series.

Mentions: Excise-tax policies vary widely across States, with some States imposing taxes on prices (i.e., ad valorem taxes) and others levying excises on quantity or volume (i.e., specific taxes). All States impose a tax on beer; in addition, all license States also impose taxes on wine and spirits.3 In general, these State excise taxes are highest for distilled spirits. State excise taxes, for the most part, have followed the same patterns as Federal taxes, with only infrequent and modest increases that have resulted in substantial declines over time in the real values of these taxes. The degree to which the real value of the State taxes has dropped depends on the inflation rate and the latest tax rates imposed by a given State. More than 20 States have not raised their beer taxes for at least 20 years, and only about 10 States have raised them in the last decade.4 In some extreme cases, the deflated tax rates per drink have even declined to close to zero. For example, the nominal State beer excise tax in Wyoming was 2 cents per gallon in 2009, and it had been set since 1963. Similar situations exist in (but are not limited to) Missouri, Wisconsin, Oregon, and Kentucky. Estimates indicate that from 1951 to 2009, the average real State beer tax has fallen from almost 42 cents per gallon to just over 11 cents per gallon (see figure 2) (Beer Institute 2009).


The effects of prices on alcohol use and its consequences.

Xu X, Chaloupka FJ - Alcohol Res Health (2011)

Average real State taxes on beer tax 1951–2009.SOURCE: Brewers Almanac 2009: Beer Institute.NOTE: The estimates are based on the mathematic average of beer taxes of 50 States and the District of Columbia. Inflation-adjusted values are based on the All Urban Consumers consumer price index series.
© Copyright Policy - public-domain
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC3860576&req=5

f2-arh-34-2-236: Average real State taxes on beer tax 1951–2009.SOURCE: Brewers Almanac 2009: Beer Institute.NOTE: The estimates are based on the mathematic average of beer taxes of 50 States and the District of Columbia. Inflation-adjusted values are based on the All Urban Consumers consumer price index series.
Mentions: Excise-tax policies vary widely across States, with some States imposing taxes on prices (i.e., ad valorem taxes) and others levying excises on quantity or volume (i.e., specific taxes). All States impose a tax on beer; in addition, all license States also impose taxes on wine and spirits.3 In general, these State excise taxes are highest for distilled spirits. State excise taxes, for the most part, have followed the same patterns as Federal taxes, with only infrequent and modest increases that have resulted in substantial declines over time in the real values of these taxes. The degree to which the real value of the State taxes has dropped depends on the inflation rate and the latest tax rates imposed by a given State. More than 20 States have not raised their beer taxes for at least 20 years, and only about 10 States have raised them in the last decade.4 In some extreme cases, the deflated tax rates per drink have even declined to close to zero. For example, the nominal State beer excise tax in Wyoming was 2 cents per gallon in 2009, and it had been set since 1963. Similar situations exist in (but are not limited to) Missouri, Wisconsin, Oregon, and Kentucky. Estimates indicate that from 1951 to 2009, the average real State beer tax has fallen from almost 42 cents per gallon to just over 11 cents per gallon (see figure 2) (Beer Institute 2009).

Bottom Line: Federal and State excise taxes have increased only rarely and, when adjusted for inflation, have declined significantly over the years, as have overall prices for alcoholic beverages.Yet studies examining the effects of increases of monetary prices (e.g., through raising taxes) on alcohol consumption and a wide range of related behavioral and health problems have demonstrated that price increases for alcoholic beverages lead to reduced alcohol consumption, both in the general population and in certain high-risk populations, such as heavier drinkers or adolescents and young adults.These effects seem to be more pronounced in the long run than in the short run.

View Article: PubMed Central - PubMed

Affiliation: Health Policy Center at the Institute of Health Research and Policy, University of Illinois at Chicago, Chicago, Illinois.

ABSTRACT
Over the past three decades, economists and others have devoted considerable effort to assessing the impact of alcoholic-beverage taxes and prices on alcohol consumption and its related adverse consequences. Federal and State excise taxes have increased only rarely and, when adjusted for inflation, have declined significantly over the years, as have overall prices for alcoholic beverages. Yet studies examining the effects of increases of monetary prices (e.g., through raising taxes) on alcohol consumption and a wide range of related behavioral and health problems have demonstrated that price increases for alcoholic beverages lead to reduced alcohol consumption, both in the general population and in certain high-risk populations, such as heavier drinkers or adolescents and young adults. These effects seem to be more pronounced in the long run than in the short run. Likewise, price increases can help reduce the risk for adverse consequences of alcohol consumption and abuse, including drinking and driving, alcohol-involved crimes, liver cirrhosis and other alcohol-related mortality, risky sexual behavior and its consequences, and poor school performance among youth. All of these findings indicate that increases in alcoholic-beverage taxes could be a highly effective option for reducing alcohol abuse and its consequences.

Show MeSH
Related in: MedlinePlus