Is response to price equal for those with higher alcohol consumption?

Aims To determine if taxation policies that increase the price of alcohol differentially reduce alcohol consumption for heavy drinkers in Australia. Design A two-part demand model for alcohol consumption is used to determine the price elasticity of alcohol. Quantile regression is used to determine the price elasticity estimates for various levels of consumption. Setting The study uses Australian data collected by the National Drug Strategy Household Survey for the years 2001, 2004 and 2007. Measurements Measures of individual annual alcohol consumption were derived from three waves of the National Drug Strategy Household Survey; alcohol prices were taken from market research reports. Findings For the overall population of drinkers, a 1 % increase in the price of alcohol was associated with a 0.96 % (95 % CI −0.35 %, −1.57 %) reduction in alcohol consumption. For those in the highest 10 % of drinkers by average amount consumed, a 1 % increase in the price of alcohol was associated with a 1.26 % (95 % CI 0.82 %, 1.70 %) reduction in consumption. Conclusions Within Australia, policies that increase the price of alcohol are about equally effective in relative terms for reducing alcohol consumption both for the general population and among those who drink heavily.

Alcohol drinking | Alcohols | Alcoholic beverages | Price elasticity | Consumption taxes | Income taxes | Consumer prices | Estimated taxes | Drug and alcohol surveys | Consumer economics