The Effect of Price on the Behavioural Economic Substitutability of Non‐Alcoholic and Alcoholic Beverages

Introduction Increased availability of non‐alcoholic (NA) beverages, or beverages emulating characteristics of alcoholic drinks but that contain no or substantively lower alcohol content, is largely assumed to decrease alcohol consumption. The degree to which consumption of NA beverages may replace alcoholic beverages as alcoholic beverage prices increase (economic substitutability) has not been established. The current study investigated the substitutability of NA beer for alcoholic beer. Methods US adults reporting alcoholic beer consumption ( n = 120) completed demand tasks in which alcohol was available alone and with a fixed price alternative concurrently available ($5.00 non‐alcoholic beer, $2.50 non‐alcoholic beer, $2.50 alternative such as juice, soda). Results Introducing any alternative was associated with a one drink reduction in alcohol purchasing. $2.50 NA beer demonstrated the strongest evidence for substitutability, with a negative I value (degree of consumption sensitivity to the price of an alternative commodity) significantly different from zero (−0.238) and greater increases in $2.50 NA beer consumption at ascending alcoholic beer prices. Discussion and Conclusions NA beer may serve as an economic substitute to alcoholic beer, though only when the NA beer is available at a lower price (i.e., $2.50) than NA is typically sold at on‐premise alcohol outlets. NA beer sold at prices similar to alcoholic beer is no more effective as a substitute than traditional non‐alcoholic beverages, whereas substantively cheaper NA beer functions as a more effective substitute. Results support a concerted public health effort to reduce the relative cost of NA beers to increase their potential to reduce alcohol consumption.