The Economics of Alcohol Abuse

Summary The paper examines economic aspects of alcohol abuse, particularly the social costs of alcohol abuse and the taxation of alcohol. The social costs section reviews the available literature and sets out the relevant costs, discussing how the work could be extended and improved. The next section explains the economic rationale behind the taxation of alcohol and its relationship to social costs. The paper then examines the effects of alcohol taxation on consumption and how this link is estimated. Some estimates are given from the literature showing how changes in the price of alcohol and in incomes can affect consumption. The paper concludes that there is much research work to be done on the economic aspects of alcohol abuse.