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Raising Alcohol Taxes is Least Costly Way to Reduce Alcohol-Related Harms

Raising Alcohol Taxes is Least Costly Way to Reduce Alcohol-Related Harms

A new international study shows that raising alcohol taxes may be one of the most cost-effective methods of reducing the harms caused by alcohol consumption.

In addition, restricting alcohol advertising and hours of sale were shown to be successful at reducing hazardous and harmful alcohol use and, as a result, improving overall health in the population.

The findings are published in the Journal of Studies on Alcohol and Drugs.

“Tax increases may not sound the most attractive of policy options but are the single most cost-effective way of diminishing demand and reining back consumption,” says lead researcher Dan Chisholm, Ph.D., of the Department of Mental Health and Substance Abuse at the World Health Organization in Geneva, Switzerland.

Researchers from the World Health Organization and one of its academic collaborating centers used a statistical model to determine which of five alcohol control strategies would be a cost-effective public health policy to reduce deaths and harms from alcohol consumption.

The strategies they investigated include:

  • Increasing alcohol taxes
  • Restricting hours of operation for retailers
  • Limiting advertising
  • Stronger enforcement of blood-alcohol concentration laws
  • Wider use of alcohol-problem screenings conducted at primary care clinics

According to the findings, a 50 percent hike in alcohol excise taxes — taxes worked into the price of the product that the consumer might not “see” — would cost less than the equivalent of USD $100 for each healthy year of life gained in the overall population and would add 500 healthy years of life for every one million people.

To put that tax increase in perspective, it might represent mere pennies per drink. According to a study in the January issue of the journal, state excise taxes in America average only three cents per 12 ounces of beer or a 5-ounce glass of wine and only five cents for a drink with 1.5 oz. of hard liquor.

“Current rates of excise taxes on alcohol vary considerably between jurisdictions but can be set very low,” Chisholm says, “for example because of low awareness of the risks that alcohol consumption can pose to health or because of strong advocacy from economic operators.”

Increasing these taxes is “an ambitious but feasible strategy,” according to the study, and this change in public policy “would bring excise taxes for alcoholic beverages more in line with those imposed on tobacco products.”

Two other methods — restricting hours of operation for off-premise alcohol retailers or implementing and enforcing strong restrictions/bans on alcohol advertising (on the Internet, radio, television, and billboards) — each would also cost less than $100 per healthy year of life gained and would add up to 350 healthy life years for every one million people in the population.

Stronger enforcement of blood alcohol concentration laws by increasing the number of sobriety checkpoints would be a somewhat less cost-effective policy: It would cost up to $3,000 per healthy year of life saved and would add fewer than 100 years of healthy life per one million people. The higher cost would be the result of more time invested by police and the equipment required at checkpoints.

Finally, wider use of brief alcohol-problem screening and intervention conducted by primary care doctors would generate up to 1,000 years of healthy life per one million people, but cost up to $1,434 per year of healthy life gained.

The study used data from 16 countries, including upper middle- and high-income countries (such as the United States, Germany, Japan, and China) as well as low- and lower middle-income countries (such as Guatemala, India, Ukraine, and Vietnam).

The researchers note that they likely underestimated the benefits of improved alcohol control strategies. Their study did not look at other alcohol-related issues, such as reduced property damage or better productivity at work.

Still, not everyone will necessarily think that less alcohol consumption is a good policy.

“Implementation of these effective public health strategies is actively fought by the alcohol industry, often with threats of lost jobs and/or revenue for countries,” the authors write.

In the end, the authors hope their research will “guide decision makers toward a more rational and targeted use of available resources . . . for addressing the substantial and still growing burden of disease attributable to alcohol use.”

Previous studies have suggested that more than five percent of deaths worldwide and over four percent of diseases are directly related to alcohol.

Source: Journal of Studies on Alcohol and Drugs

Raising Alcohol Taxes is Least Costly Way to Reduce Alcohol-Related Harms

Traci Pedersen

Traci Pedersen is a professional writer with over a decade of experience. Her work consists of writing for both print and online publishers in a variety of genres including science chapter books, college and career articles, and elementary school curriculum.

APA Reference
Pedersen, T. (2018). Raising Alcohol Taxes is Least Costly Way to Reduce Alcohol-Related Harms. Psych Central. Retrieved on October 27, 2020, from
Scientifically Reviewed
Last updated: 10 Aug 2018 (Originally: 10 Aug 2018)
Last reviewed: By a member of our scientific advisory board on 10 Aug 2018
Published on Psych All rights reserved.