Can Minimum Pricing Combat Alcohol Abuse? Evidence from Canada

When thinking about “dangerous drugs,” illicit substances such as heroin and cocaine usually come to mind. However, there is compelling evidence that alcohol is substantially more harmful to society than illegal drugs; alcohol is the third leading cause of preventable deaths in the U.S., behind only tobacco and poor diet. According to the World Health Organization (WHO), in 2012 nearly six percent of global deaths were attributable to alcohol. It is associated with a host of health issues and reckless behaviors, including crime. Dr. Mark Kleinman, a drug policy researcher at the Harvard Kennedy School of Government, describes the relationship between drugs and crime as, “all illegal drugs combined are to alcohol as the Mediterranean is to the Pacific.” And still, alcoholism appears to be on the rise, particularly among poor and minority households.

While few countries are interested in the total prohibition of alcohol, other policy interventions are available. In particular, much policy research focuses on the effects of liquor taxes on alcohol abuse. Most of this work has found that increasing the price of alcohol leads to decreases in associated mortality and morbidity rates. However, others question which populations these policies affect most, and whether, in particular, they disproportionately affect low-income drinkers. In their 2017 paper, “The Impacts of Minimum Alcohol Pricing on Alcohol Attributable Morbidity in Regions of British Columbia, Canada with Low, Medium, and High Mean Family Income,” Jinhui Zhao and Tim Stockwell investigate these questions, looking at the effects of one such pricing policy across income levels.

Zhao and Stockwell looked at minimum prices set by the government for different types of alcoholic drinks over twelve years across 89 administrative subdivisions of British Columbia known as Local Health Areas. The researchers also collected data on alcohol-attributed hospital admissions in each area. After adjusting for the unique characteristics of each Local Health Area—such as the number of liquor outlets and demographics—the researchers ran statistical analyses to see if there was a relationship between hospital admissions and minimum prices and how the relationship changed with income levels across regions.

Overall, higher minimum prices significantly decreased acute hospital admissions caused entirely by alcohol abuse, but not admissions where alcohol played only a partial role. They also found that hospital admissions for associated chronic diseases decreased. However, these effects varied as income level changed. Minimum price changes in low-income areas had the largest effect on public health. This finding is especially important because low-income areas tended to have the highest baseline level of morbidity related to alcohol abuse. Zhao and Stockwell suggest that minimum prices might have larger effects in low-income areas because alcohol is already less affordable to these populations.

As public health leaders and policymakers continue to grapple with alcohol taxes, Zhao and Stockwell’s research helps clarify the tradeoffs policymakers confront when choosing how to address alcohol pricing efficiently and equitably. On one hand, the targeted impacts of minimum pricing on low-income areas may be appealing because these populations receive the largest public health benefits. Additionally, minimum alcohol pricing targets the heaviest consumers of alcohol. On the other hand, such pricing schemes are regressive, disproportionately affecting low-income consumers.

Article source: Zhao, Jinhui, and Tim Stockwell. “The Impacts of Minimum Alcohol Pricing on Alcohol Attributable Morbidity in Regions of British Columbia, Canada with Low, Medium, and High Mean Family Income.” Addiction, Vol. 112 (2017): 1942-1951.

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