Light, Moderate, and Heavy Drinking


Most countries around the world regulate alcohol in some form or another. Taxation is a popular form of regulation, but governments use many different approaches including prohibiting sales to minors, minimum purchase prices, and restrictions on days and hours of sales. Knowing how these policies affect the demand for alcohol is necessary for setting optimal policies. A common feature of most of the existing studies on alcohol policies is that they evaluate the effectiveness of the policy at the mean level of consumption. However, setting alcohol taxes or other regulations based on mean consumption may not produce desirable results given that low levels of consumption have different health and consumer utility considerations than higher levels. The purpose of this chapter is to review the literature on price and non-price alcohol regulations, evaluated at different levels of drinking.

Handbook of Labor, Human Resources and Population Economics