The Health Impact of Alcohol Taxes

Chaloupka’s studies are single-market studies, which means that he does not look at the interaction effects or substitution effects from other markets. For example, an increase in alcohol prices may put a high burden on lower income individuals, who may substitute alcohol for more dangerous chemicals. Low-income individuals may decide to seek opioids or inhalants instead of drinking alcohol, considerably more dangerous behaviors. Such a scenario would mean deaths from alcohol might shift to deaths from opioid overdose or inhalation. In this case, death from alcohol would fall statistically as taxes on alcohol increase, but deaths in all of society would increase. This partial, rather than general, analysis of the economy could lead decision-makers to implement policies with unintended and dangerous consequences.

via The Health Impact of Alcohol Taxes – Tax Foundation

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