Thursday, 25 March 2010

What do the bingers drink?

Well Australian binge drinkers anyway. A study by Preety Srivastava and Xueyan Zhao looks at What Do the Bingers Drink? Microeconometric Evidence on Negative Externatilities of Alcohol Consumption by Beverage Types. The abstract reads,
The recent debate on alcohol tax reform and recommendations from the Henry Tax Review in Australia have highlighted the need for quantifying externalities of excessive alcohol consumption by beverage types. This paper presents micro-level information from the Australian National Drug Strategy Household Surveys to examine the association between risky drinking behaviour, drinker characteristics, health and labour market status, and types of alcohol beverages consumed. Drinkers of regular strength beer (RSB) and RTDs in a can (RTDC) have the highest incidences of heavy bingeing, and low alcohol beer and fortified and bottled wine least likely. Bottled spirits (BS), RSB and RTDC are most likely linked to risky behaviour such as property damage and physical abuse under alcohol influence. All three spirit products are overwhelmingly the favourable drinks for the underage and young drinkers. Risky drinking behaviour is not found to be strictly associated with the alcohol strength of the products.
Well I'm glad to see we wine drinkers are the least likely to indulge in heavy bingeing. Interestingly the study finds that drinking is mostly done at home, thus outside the reach of potential controls in public places. All this points to the fact that if you want to use a beverage tax then the tax should be based, at least in part, on type of drink. Spirit products should have the highest tax while low alcohol beer and wine the lowest. It is also interesting that risky drinking behaviour is not found to be strictly associated with the alcohol strength of the products, so a tax based on alcohel content is not a good idea.This assumes of course that drinkers are responsive to price changes and this responsiveness is not substantially weaker for binge drinkers.

1 comment:

Eric Crampton said...

We have estimates of the participation elasticity of binge drinking to alcohol prices. It's inelastic, but not perfectly so. Search back on Offsetting, I cite it somewhere in there.

I think you may be ignoring some selection effects though: if the kind of person who likes to binge drink finds a particular product most convenient at current prices for that purpose, then just imposing a tax on that product would induce substitution to other products.