A review of alcohol consumption and alcohol control policies

Purpose - The purpose of this paper is to present a review of the literature on alcohol consumption, the externality cost of alcohol consumption, and the effectiveness of policy options. Design/methodology/approach - Evidence on the cost to society of alcohol consumption, the amount of excise tax collected, the demand response of consumers, and the effectiveness of alcohol-control policies is reviewed. Findings - Alcohol excise taxes generally, but not everywhere, fail to recover the externality costs placed on society that arise from alcohol consumption. Where externality costs are greater than excise revenue higher excise taxes are one effective and appropriate policy response. Complementary policies to higher excise taxes are likely to include: the provision of more information about harmful effects to consumers, especially the young; greater enforcement of drunk-driving laws and zero tolerance drunk-driving laws for young drivers. Restrictions on the opening hours of late night venues may have a modest impact on reducing costs, while advertising restrictions are unlikely to be effective. Originality/value - Typically. articles on alcohol consider a single issue. This review paper brings together information from both the health stream of alcohol studies and the economics stream of alcohol studies and provides a useful survey and synthesis of the literature.