Setting the record straight – a letter on minimum pricing

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Letter published in The Irish Times on Friday, September 6

Sir, – Dan O’Brien (Business Opinion, August 23rd), claims that the case for higher prices to cut consumption was weak and getting weaker. Unfortunately, he chose to rely mainly on theoretical arguments and colourful rhetoric in his article. He ignored the overwhelming evidence from economics and public health research that shows higher prices for alcohol have a statistically reliable negative effect on alcohol consumption.

Hundreds, and probably thousands, of academic papers in economics and other social sciences have been devoted to estimating the relationship between the price of alcohol and quantity consumed. Rather than rely on any particular study or any particular review of this literature, the most reliable way of summarising this research is by way of a statistical technique known as meta-analysis. This uses various aspects of previously published statistical estimates to come up with an overall estimate of the relationship between the price of alcohol and quantity consumed.

In 2009, a group of researchers at the University of Florida, led by Alexander Wagenaar, published such an analysis. They used data from 118 published studies which between them included over 1,000 estimates of the relationship between alcohol prices and consumption. Their conclusions are emphatic: “Price affects drinking of all types of beverages, and across the population of drinkers from light drinkers to heavy drinkers. We know of no other preventive intervention to reduce drinking that has the numbers of studies and consistency of effects seen in the literature on alcohol taxes and prices.”

An earlier meta-analysis study by economist, Craig Gallet, published in 2007, found very similar results. Taking all of these studies into account it is reasonable to think that in order to reduce total consumption by, say 10 per cent, one would need to increase the price of alcohol by about 20 per cent.

Dan O’Brien describes proposals to introduce minimum prices for alcohol as simply bizarre and utter folly. In fact, as your correspondent Frank Murray pointed out (August 28th), the advantage of minimum pricing policies is that they target heavy drinkers who tend to spend much less per unit of alcohol than do light to moderate drinkers.

The proposal to introduce minimum pricing for alcohol in England was analysed in a comprehensive epidemiological and economic model constructed by researchers at the University of Sheffield. The model analysed the effects of policies on different types of drinkers and also considered the effects of various policies on mortality and morbidity associated with alcohol. The researchers found that a 50p minimum unit price would reduce consumption amongst harmful drinkers by over 10 per cent compared to less than 4 per cent for moderate drinkers. The researchers also estimated that the policy would lead to 42,500 fewer crimes in the first year and over 10 years led to 14,960 fewer deaths and 481,373 fewer hospital admissions.

It is reasonable to expect that people with a vested interest in making money from selling alcohol will ignore scientific evidence on how alcohol consumption can be reduced. But we expect better from your Economics Editor and it is disappointing and puzzling that he chose to ignore the vast amount of economic evidence that suggests that economic policies can reduce the harm caused by excessive alcohol consumption. – Yours, etc,


Moycullen, Co Galway.