Evaluation of Minimum Price for Alcohol (MPA) Bill in Wales
(dated November 26,
2017)
Jon P.
Nelson, Ph.D. <XXXXXXX>
Professor
Emeritus of Economics
Pennsylvania State University
Introduction
1. I
reviewed the following MPA reports:
Public Health (Minimum Price for Alcohol) (Wales)
Bill – Explanatory Memorandum incorporating the Regulatory
Impact Assessment and Explanatory Notes, October 2017
[EM].
Model-based Appraisal of Minimum Unit Pricing for
Alcohol in Wales – An Adaptation of the Sheffield Alcohol
Policy Model version 3, September 2014 [Sheffield Study or
SS].
Advisory Panel on Substance Misuse, Minimum Unit
Pricing: A Review of Its Potential in a Welsh Context, July 2014
[APoSM].
2. EM (p.
124) states that:
The objective of the minimum pricing legislation
is to tackle alcohol-related harm, including reducing
alcohol-attributable hospital admissions and alcohol-related
deaths, by reducing alcohol consumption among harmful and hazardous
consumers, including among young people in Wales.
3. While
the above reports contain evidence regarding possible effects of
higher prices on alcohol consumption and alcohol-related harms,
evidence for harmful and hazardous drinking is incomplete or
presented in a misleading manner. Additional evidence reviewed here
indicates that MPA will not be as effective as claimed for
consumption or harms. Major errors and problems are detailed
below.
3.1 EM and APoSM also employ rhetorical
language in attempting to make a case for MPA. Examples of
misleading language from EM include: “strong evidence”
(p. 10); “growing body of evidence and research that shows a
strong link” (p. 20); “there is clear evidence”
(p. 47); “there is a strong evidence base” (p. 65);
“strong and consistent link” (p. 78); “robust
process, using conservative assumptions” (p. 80);
“robust evidence base” (p. 84); and “strong and
consistent evidence” (p. 121). APoSM employs similar
rhetorical language, including: “the evidence base is
extensive” (p. 10); “modelling is … well-founded
and robust” (p. 10); “strong evidence” (p. 55);
and “evidence consistently indicates” (p.
55).
4. As
shown below, these bold claims ignore conflicting evidence, and
often are presented prior to an actual examination of evidence, so
the accompanying review is presented, ipso facto, as obvious
truth. This language is misleading and in the current context,
deliberately so. It should be removed or modified.
Economic modelling by Sheffield
5. In
principle, minimum unit pricing operates by placing a floor under
prices for alcohol beverages, with an intended effect of limiting
choice for all drinkers, especially harmful or hazardous drinkers
who tend to consume greater quantities of low-cost and/or
higher-alcohol content beverages. Evidence for beneficial effects
of minimum pricing are based largely on the University of Sheffield
Model as adapted for Wales. The Sheffield Study is
deficient:
5.1 Many details of the Sheffield Model are
largely unknown or underreported for Wales and other countries
(e.g., Canada, Scotland, UK), including forecast error intervals
for policy simulations. Confidence intervals for forecasts increase
in size as model inputs or parameters are changed importantly
relative to current values. Sheffield
regressions and simulations lack standard measures of forecasting
accuracy. The estimates are always presented as
“precise” point estimates (e.g., reduction of 53
deaths and 1,400 fewer hospital admissions, SS, p. 10), which hides
the range of uncertainty for effects and possible benefits of MPA.
Although a sensitivity analysis is presented for some parameters
(p. 77), this does not fully capture uncertainty surrounding
forecasts for a 20-year period. Statistical forecast intervals and
forecast statistics should be presented for all Sheffield Model
estimates. Point estimates are insufficient as the sole scientific
basis for MPA. All estimates should include standard errors, and
confidence intervals for parameter estimates should be reflected in
the sensitivity analysis.
5.2 Estimated own-price elasticities for the
UK (SS, p. 25) are not representative of values obtained elsewhere
for beverage alcohol, and most cross-price elasticity estimates do
not meet a widely-accepted test for statistical significance (p
< 0.05). For example, a meta-analysis by Nelson (2014a) reports
a consensus beer price elasticity that is only -0.20 compared to
values of -0.98 (off-premise) and -0.79 (on-premise) used by
Sheffield (p. 25). Even if the Model can
be shown to be internally valid, its external validity is in doubt.
Further, large elasticities by beverage reported by Sheffield do
not coincide arithmetically with an overall average elasticity of
-0.50 used elsewhere in MPA reports (APoSM, p. 54; EM, p. 28; and
SS, p. 79). Price elasticity estimates for Wales for harmful and
hazardous drinkers are required to formulate an evidence-based MPA
policy.
5.3 Various other Sheffield estimates show low
overall levels of statistical reliability. As one example, the
Sheffield Study (p. 29) in Table 4.5 reports statistical models for
risks of binge drinking and mean daily consumption. Values for
R-squared statistics range from only 0.19 to 0.45, indicating that
less than 50% of variation in the data are explained by the
regressions. Uncertainty in estimates in Table 4.5 is not reflected
in model simulations. This is important
because some alcohol-related harms are linked to “peak day
consumption.” In many cases, parameters are reported without
standard errors or other indicators of significance. For example,
Table 4.13 (p. 48) simply reports slope estimates for work absence,
without regressions or associated standard errors. This is
incomplete reporting of key results. All statistical estimates and
simulations using the Sheffield Model need to report standard
errors, complete regression results, and forecast error intervals
and other pertinent statistics. Only if model
simulations reflect statistical (in)accuracy can policymakers
accurately judge the possible range of impacts of MPA.
5.4 A major omission in the Sheffield Study is
its failure to model outcomes if there is a shift in major parts of
the price distribution when a MUP is imposed on the lower end of
that distribution (EM, p. 135). An across-the-board shift in prices
imposes costs on all consumers, regardless of drinking level, which
are not accounted for in current benefit-cost calculations. Sheffield Model
simulations need to be modified to account for this possibility,
but more importantly benefit-cost analysis for MPA needs to reflect
costs that will be imposed on moderate consumers due to higher
prices generally.
5.5 EM (p. 64) argues erroneously that it is
not possible to quantify “. . . a possible reduction in
consumer utility” [due to higher prices].
Monetary measurement of loss of consumer surplus from price
increases is a standard exercise in benefit-cost analysis, and it
is inconceivable that this statement was written by a trained
economist. Hence, it is not known accurately that “. . . MUP
policies would have only a small impact on moderate drinkers”
(EM, p. 65). The benefit-cost analysis should be modified to
account for loss of consumer surplus arising due reduced
consumption of alcohol by all consumers, under a variety of
assumptions concerning the final distribution of prices.
5.6 In addition to MUP, the Sheffield
Model is used to evaluate other possible policies, including a
general 10% price increase and a ban on below-cost selling. For the
latter, the Sheffield Study (p. 79) argues that “a policy to
ban below-cost selling has virtually no impact on consumption and
alcohol-related harms.” This conclusion is premature without
statistical confidence intervals for all Model estimates. The
statement is based on point estimates, which might have wide
ranges. Simulations of other policies require confidence intervals
for the forecasts involved. The estimates also fail to account for
a general shift in the distribution of alcohol prices, following
imposition of a MUP.
5.7 Simulation modelling is not a perfect
substitute for evidence of actual real-world price differences and
changes. The Sheffield Model is based on general population data.
The scientific evidence assessed, however, should be focused on
harmful and hazardous drinkers. Population-level econometric
studies incorporate all manners of drinking levels and patterns,
including in many instances individuals who abstain from
consumption of alcohol.
Evidence relating to heavy drinking, alcohol
prices, and alcohol harms
6. EM (pp.
27-35) provides a highly selective survey of the evidence base
relating to impacts of price on alcohol consumption and associated
harms. The survey is neither comprehensive nor systematic, but it
is used to arrive at a sweeping conclusion that “. . . in the
majority of cases, this evidence demonstrates that in
response to an alcohol price increase, there is a decrease in
alcohol consumption and – crucially – a decrease in
alcohol-related harm and mortality. Likewise, when there is a
decrease in price, alcohol-related harm increases” (EM, p.
32, emphasis added). These claims are erroneous and
misleading.
7. A
comprehensive review of alcohol policies related to taxes and
prices is important for several reasons. First, the Sheffield Model
is not a study of real-world policy changes relating to prices,
alcohol taxes, minimum prices, below-cost selling, or other policy
changes. The Sheffield Model might be best described as a
“correlational study,” which leaves issues of causality
unresolved. Second, MUP is targeted toward heavy and hazardous
drinking, and many economic studies are based on population-level
data. Third, as noted by EM (p. 32, citing Boniface et al. 2017),
the evidence-base for MUP has been produced by a small number of
research teams and “the quantitative uncertainty in many
estimates or forecasts is often poorly communicated outside the
academic literature.” This comment echoes my concern above
that the Sheffield Study has failed to provide sufficient
statistical uncertainty measures.
8. I next
provide several examples of the incompleteness of evidence cited by
EM for alcohol and price as it relates to both heavy drinkers and
alcohol-related harms. My critique is not complete, but is provided
to indicate that there are important scientific omissions in EM and
APoSM, which need to be rectified before decisions are made on the
MPA Bill. The additional evidence considered here pertains to
real-world price changes, and not those produced by model
simulations. This is important as external validation of Sheffield
Model estimates for Wales.
8.1 Switzerland – EM (p. 33) cites
one study for Switzerland (Heeb et al. 2003) for an actual
policy-induced change in alcohol prices. However, there have
been five studies of this policy change for alcohol consumption,
with conflicting results (Nelson and McNall 2017, p. 430). Overall,
Swiss results indicate that spirits consumption rose modestly
and temporarily for heavy drinkers following a price reduction.
One study also is available for Switzerland for changes in alcohol
dependency among younger drinkers, with null results (Nelson
and McNall 2016b, p. 268).
8.2 Finland – there has been extensive study of
policy-induced changes in Finnish prices, but EM (p. 33) reports
results for only three studies for alcohol-related harms. This is
selective reporting. For consumption changes, Nelson and McNall
(2017, p. 424) report results for nine studies. We conclude that
“overall, consumption results for Finland are mixed”
(p. 425), with possible short-term effects on heavy drinkers
and little effect on lower-income younger persons and youth. For
alcohol-related harms, Nelson and McNall (2016b, p. 267) review 28
studies covering multiple harms, including studies relating to
mortality and hospitalizations (15 studies); assaults and other
crimes (5 studies); drink-driving (3 studies); intoxication (4
studies); and alcohol-dependency (2 studies). Results are generally
mixed for most harms, but lower prices in Finland had some effects
on mortality and hospitalizations, especially for liver disease
among older persons (p. 270). This result is indicative of nuanced
or selective effects of alcohol price changes on distinct
subpopulations and/or distinct alcohol-related harms.
8.3 Sweden – EM (p. 34) ignores the large body of
evidence relating to price reductions in Sweden, and chooses to
focus exclusively on one study of quality substitution due to a
price increase. Nelson and McNall (2017, p. 427) examine 13 studies
of Swedish alcohol consumption following actual policy-induced
changes in prices. Numerous null or negative results are reported
in these studies, and again any increases in consumption appear to
be short-term in nature. In addition, Nelson and McNall
(2016b, p. 267) review 20 studies for alcohol-related harms in
Sweden following actual price changes. We conclude (p. 270) that
any effects on mortality and hospitalizations were
short-term in nature, and other effects were weak or
non-existent.
9.
Summary of alcohol consumption changes following actual price
changes in five countries – In a peer-reviewed study,
Nelson and McNall (2017) examined 29 primary studies containing 35
sets of results for alcohol consumption, including results for
binge drinking (18 studies), young adult and youth alcohol
consumption (18 studies), and older adults and heavy-drinking
adults (16 studies). Results are reported for five countries, and
some studies cover multiple countries or outcomes. Our general
conclusion from a comprehensive review is as follows:
Overall, we find a general lack of
consistent results that can provide a sound evidence-base for
development of alcohol tax policy. In all countries there is a lack
of robust results for major segments of the population, following
interventions that reduced prices and relaxed import quotas . . .
In many cases, positive policy effects are short-term in nature or
apply to particular groups of individuals or subpopulations . . .
what we learn from this review is that alcohol tax and price
changes are likely to have selective effects on drinking and
drinking patterns (Nelson and McNall 2017, p. 431).
10.
Summary of alcohol harm changes following actual price changes
in nine countries – In a peer-reviewed study, Nelson and
McNall (2016b) examined 45 studies for nine countries for five
harmful outcomes: mortality and hospitalizations; assaults and
other crime; drink-driving; intoxication; and
alcohol-dependency. We reviewed 69
outcomes as some studies covered more than one harm or country. Our
results and conclusion are summarized as follows:
Findings indicate that
changes in taxes and prices have selective effects on harms.
Mortality outcomes are positive for liver disease and older
persons, especially in Finland and Russia. Mostly null results for
assaults and drink-driving are found for five countries.
Intoxication results for Nordic countries are mixed for selective
subpopulations. Results for survey [dependency] indexes are mixed, with no strong
pattern of outcomes within or across countries. Prior reviews
stress taxes [and pricing] as a comprehensive and
cost-effective intervention for addressing alcohol-related harms. A
review of natural experiments indicates the confidence placed on
this measure is too high, and natural experiments in alcohol policy
had selective effects on various subpopulations (Nelson and
McNall 2016b, p. 264).
11. While
policy changes studied by Nelson and McNall (2016b, 2017) do not
include minimum unit prices as such, they do provide information on
the kinds of evidence cited by EM in support of a MUP policy for
Wales. Further, these policy changes entail across-the-board price
reductions. Heavy drinkers account for a substantial share of total
alcohol consumption. If harmful and hazardous drinkers are as
sensitive to prices as claimed by supporters of MUP, then one might
expect to see dramatic effects of these natural experiments on both
alcohol consumption and alcohol-related harms. Dramatic effects are
not apparent, especially over the longer-run.
12. Three
other systematic reviews by Nelson (2013c, 2014d, 2015a) –
all peer-reviewed ‒ provide
evidence on price-sensitivity of individuals who engage in heavy or
hazardous consumption of alcohol. Only one study ‒ Nelson (2013c) ‒ was
incorporated in EM (p. 82) and APoSM (p. 54), which again is
indicative of uninformed or selective reporting. A summary of each
review follows:
12.1 Nelson (2013c) examined 19
individual-based studies (survey sample methods) that examine price
responses by heavy-drinking adults and nine studies of prices and
cirrhosis mortality. A total of 573 studies relating to alcohol
prices and taxes were retrieved as a first step in the review
process, with final selection based on further examination of
studies and their content. The 19 studies for consumption excludes
population-level empirical studies. The 19 studies include results
from five countries, while the nine studies cover multiple
countries, including an international OECD panel. This peer-reviewed
study concluded the following:
The review finds only two
studies [out of 19]
of heavy drinking with a significant and substantial negative
price response. For cirrhosis mortality, only two studies [out
of 9] find a significant negative price response. Overall, the
role of price and taxes as a significant deterrent to heavy
drinking by adults is uncertain (Nelson 2013c, p. 265).
12.2 Nelson (2014d) provides a review of
alcohol prices and gender differences for drinking and heavy
drinking by adults and young adults. Starting again with a broad
database, relevant studies were narrowed to 15 studies of adult
drinking and eight studies of drinking by young adults, aged 18-26
years. As in Nelson (2013c), this review included
discussion of samples, measurement and econometric issues, and key
empirical results in each primary study. I attempt to review all
relevant evidence on the issue at hand, and not a selective slice
thereof. Results of the peer-reviewed study are as
follows:
First, adult men have
less [price]
elastic demands compared to women. Second, there is little or no
price response by heavy-drinking adults, regardless of gender.
Third, although the sample is small, price might be important for
drinking participation for young adults. Fourth, the results
strongly suggest that heavy drinking by young adults, regardless of
gender, is not easily dissuaded by higher prices (Nelson 2014d,
p. 1260).
12.3 Nelson (2015a) conducted a systematic
review – again peer-reviewed ‒ for effects of alcohol prices (or tax surrogates) on binge
drinking for three age groups: youth, young adults, and adults.
Outcomes examined include binge participation, intensity and
frequency. Criteria for data collection and potential sources of
bias are discussed, including adequacy of price data.
Fifty-six relevant studies were
found, with studies and results distributed equally among three age
groups. Also found were five natural experiments for tax reductions
and six field-based studies examining price-promotions in bars and
pubs. This is a much larger sample of results compared to reviews
used in EM (p. 29, citing Wagenaar et al. 2009; Elder et al. 2010).
My review included results for four countries. An innovation in
Nelson (2015a, p. 4) is a demonstration of under-reporting of
econometric studies that occurs in earlier reviews by public health
researchers, such as Wagenaar et al. (2009, 2010). My systematic
review of binge drinking studies concludes that:
Null results or mixed results are found in
more than half of the studies. The body of evidence indicates that
binge drinkers are not highly-responsive to increased prices.
Non-responsiveness holds generally for younger and older drinkers
and for male and female binge drinkers alike. Increased alcohol
taxes or prices are unlikely to be effective as a means to reduce
binge drinking, regardless of gender or age group
(Nelson 2015a, p.
1).
13. As MUP
is specifically targeted at harmful and hazardous drinking, it is
particularly important that the evidence-base focus on that element
of drinking and on real-world price changes as opposed to
simulations of price changes or evidence for population-level
drinking. Evidence for alcohol harms does suggest that there might
be some positive benefits for highly-selective subpopulations, but
selective effects are better dealt with through more targeted
policies, rather than a population-level MUP policy.
14.
Overall, these five reviews cover numerous studies, countries,
sub-populations, drinking patterns, and outcomes. My systematic
reviews provide virtually no support for the notion that MUP will
be effective over the long-term in reducing heavy use of alcohol or
alcohol-related harms. The extensive nature of these reviews is in
stark contrast to the limited and selective summaries contained in
EM and APoSM.
15. Based
on a limited review, APoSM (p. 54) argues that “. . . taken
as a whole, there are far more estimates demonstrating a strong
relationship between alcohol and price compared to a handful that
do not [citing only studies by Nelson 2013c and Ayyagari et al.
2013]. As such there is strong evidence to support a connection
between the price of alcohol and demand for
alcohol.”
15.1 This statement is a red herring in my
opinion, and unfortunately appears repeatedly in the public health
research literature (e.g., Babor et al. 2010, p. 125). The issue is
not overall “demand for alcohol,” but price responses
of those drinkers who are targets of the MPA Bill, viz.,
harmful and hazardous drinkers. APoSM is correct that
numerous studies demonstrate a relationship between price and
alcohol demand (see Nelson 2013e, 2013d, 2014a), but most of these
studies are not relevant for evaluation of the MPA Bill –
they are concerned with all manners of drinking levels and
patterns, including light, moderate, and heavy drinkers combined in
population-level studies. It is my professional opinion that only
studies in my five systematic reviews ‒ and similar focused studies ‒ are relevant to the MPA Bill and MUP. These reviews and
primary studies should be given careful assessment prior to final
consideration of the Bill. APoSM fails to provide sufficient
appraisal of the evidence-base for heavy drinkers and real-world
price changes. The APoSM report is incomplete and
misleading.
16. EM
(pp. 31-32) also selectively cites literature pertaining to alcohol
prices and heavy drinking. The EM report appears to be suggesting
that only one or two studies have reported a weak link between
prices and heavy drinking. This suggestion is false and
misleading. The EM (p. 32) also incorrectly cites Nelson
(2014a) as a study of “harmful and hazardous drinkers.”
It is not; rather it is a study of population-level
drinking.
17. As an
indication of results in other studies relevant for MPA, I have
appended quotations and references from 16 selected studies. The
appendix provides a summary of studies that report null or negative
statistical results for alcohol prices and heavy drinking or
alcohol-related harms. None of these 16 studies are cited in EM and
only one of the studies is cited in APoSM. More complete and
detailed results are contained in tables in my five
reviews:
● Nelson (2013c) – Table 3 for 19 primary studies for
heavy-drinking adults (p. 274); Table 4 for 9 primary studies
cirrhosis mortality (p. 277).
● Nelson (2014d) – Table 2 for 15 primary studies for
adults (p. 1267); Table 3 for eight primary studies for young
adults (p. 1270).
● Nelson (2015a) – Table 2 (p. 7), with binge-drinking
studies divided according to youth (18 studies); young adults (20
studies); adults (19 studies); and studies using natural
experiments (5 studies) and field methods (6 studies).
● Nelson and McNall (2016b) – Table 3 (p. 268) for a
summary of five categories of alcohol-related harms, divided by
positive vs. null evidence, for 69 outcomes (45 primary
studies).
● Nelson and McNall (2017) – Table 2 for alcohol
consumption in Denmark (6 studies); Table 3 for Finland (9
studies); Table 4 for Hong Kong (2 studies); Table 5 for Sweden (13
studies); and Table 6 for Switzerland (5 studies).
18. A summary of these five systematic reviews is
Nelson (2016c), “Economic evidence regarding alcohol price
elasticities and price responses by heavy drinkers,”
Public Health Open J, 1 (2), Aug 2016, 36-39. Open Access
at: http://dx.doi.org/10.17140/PHOJ-1-108
Anticipating unintended consequences
19.
Governments around the globe have experimented with
population-level market interventions to limit undesired activities
or promote those activities that are currently politically popular
or desired. Unintended consequences often result since it is
impossible to close-off all forms of innovation by consumers and
producers. The EM report, MPA Bill, and several commentaries speak
to issues of unintended consequences, such as cross-border shopping
(EM, p. 84, p. 128); product substitution and/or innovations (p.
132, p. 140); rent-seeking activity (p. 136); non-price competition
(p. 139); mixed or joint sales (Bill, sections 5-7); illicit and
illegal alcohol use (EM, p. 83; Duffy and Snowdon 2012; O’May
et al. 2015, 2016); and general effects on consumer spending
patterns (EM, p. 83; Snowdon 2014). This is a long list. The MPA
Bill also incorporates a “sunset provision” in Section
21-22, which provides for a report on operation and effects of MPA.
This is at least tacit recognition that MPA could be ineffective or
have unintended consequences that may not be desired.
19.1 Another unintended consequence of alcohol
policy is that beneficial effects are often short-lived. As
discussed above, this is apparent in many studies examined by
Nelson and McNall (2016b, 2017). Other recent econometric studies
also indicate that alcohol policy interventions can have short-run
effects for alcohol-related harms that do not carry-over in the
long run.
19.2 The possibility exists for positive short-run
effects if a MUP is instituted, but null or negative effects in the
long run. Hence, provisions should be made that anticipate this
consequence. First, political and
governmental organizations should refrain from self-congratulatory
speeches and notices regarding MUP, since effects may be
short-lived. Second, for appraisal of effects of MUP (if
implemented), methodologies should be adopted that recognize the
potential for short-run effects only. Third, considering
the highly political nature of alcohol policy in Wales and the UK,
those groups who are closely associated with the Bill should not be
major participants in the “sunset review.” This
includes individuals responsible for the Sheffield Model as well as
other prominent members of the public health research community,
who have been at the heart of MUP debate in Wales, UK, Ireland, and
Scotland. Frankly, it is ludicrous to suggest that such vested
interests do not exist.
19.3As
discussed by Craven et al. (2013), there are a wide range of issues
that proponents of minimum prices must first resolve, including
such concerns as substitution of marijuana and other illegal or
illicit drugs for low-price alcohol.
What can be done
20. A
brief review of the MPA Bill indicates that it is unlikely to
achieve its objectives. The EU and APoSM reports are incomplete as
scientific evidence in support of MPA. My evaluation indicates the
scientific errors and omissions in these reports. However, this
letter is not a complete evaluation as several additional issues
deserve attention, such as methods used to determine benefits and
costs of MPA and major shortcomings in empirical studies of
existing MUP policies. The focus of the MPA Bill is harmful and
hazardous consumption of alcohol and alcohol-related harms that are
a consequence of this level or pattern of alcohol use. Harmful and
hazardous drinkers, including youth, are not responsive to alcohol
prices as depicted by the Sheffield Model or many other claims in
the public health literature. Population-level studies do not
reveal this insensitivity. Review of real-world changes in
alcohol prices indicates that effects on alcohol-related harms are
likely to be nuanced or selective. These effects also
may be short-term in nature. It is important to remember that the
objective of the Bill goes beyond just increasing prices at the
low-end, and entails a desired long-term reduction in
harms.
21. In
conclusion, it is my opinion that other policy actions besides MPA
need to be considered:
1. Maintain the
existing policy banning below-cost sales of alcohol at off-premise
outlets.
2. Adopt
policies proposed under EM Option Two (p. 92), especially education
programs targeting children and young people, that strengthen the
focus on alcohol misuse. Implement laws and regulations to reduce
alcohol sales and drinking in conjunction with athletic sporting
events and other youth-oriented events, such as public concerts.
Consider limits on beverages that combine alcohol and caffeine.
Consider an increase in the legal age to 19 or 20 years. Better
enforce existing laws on underage consumption.
3. Consider
additional policy actions that better target harmful and hazardous
drinkers of all ages, including strengthening of laws and penalties
for drink-driving, public intoxication, underage drinking, and
other actions that are closely related to harmful or hazardous
consumption. Penalties such as drink-driving fines are more salient
than broad population-level policies such as advertising bans and
minimum prices. Better enforce existing laws on hazardous
consumption.
22. Thank
you for this opportunity to comment on the MPA Bill. Alcohol-use
harms are a serious problem in Wales and other countries. Such
problems deserve serious review and evaluation, including
scientific reviews that do not meet current public health views on
political correctness. Evidence-based policies should be based on
consideration of all scientific evidence, and not a selective slice
thereof.
Respectfully submitted:
Jon P.
Nelson, Ph.D. <XXXXXX>
Professor
Emeritus of Economics
Pennsylvania State University
University
Park, PA 16803 USA
Dated:
November 26, 2017
Appendix – 16 representative studies
reporting negative/null results for heavy drinking:
● The estimated tax
effects among the whole population . . . are relatively large and
significant among light drinkers but shrink substantially for
moderate and heavy drinkers. We cannot reject that alcohol
consumption of the latter types is unresponsive to tax changes (An
and Sturm 2011, p. 19).
● The more [price]
responsive group is more likely to be non-white, female, married,
and older and to consume less alcohol . . . Our results indicate
that the heavier drinking group is insensitive to price; thus
higher taxes would be unlikely to reduce negative externalities for
older drinkers (Ayyagari et al. 2013, p. 102).
● Taxation policies
which increase the price of alcohol, and are very efficient at
decreasing harms associated with reduced average consumption, may
be relatively inefficient at decreasing alcohol harms associated
with high-intensity drinking (Brynes et al. 2012, p. 2).
● The beer tax
estimate for heavy episodic drinking is negative in sign but not
statistically significant (Carpenter et al. 2007, p. 9).
● Increases in beer
prices . . . [for] both binge drinking and underage drinking . . .
indicate that male college students are virtually unresponsive to
price (Chaloupka and Wechsler 1996, p. 122).
● The liquor [tax]
responsiveness of self-reported drinks per month is large among
women and those aged 25 to 55. . . results based on the full sample
had suggested that binge drinking was unresponsive to all of the
tax measures. This pattern is repeated in models based solely on
these particular groups. More specifically, none of the results in
Table 5 indicates that increased alcohol taxation reduces binge
drinking (Dee 1999, p. 15).
● For heavier
drinking . . . the overall price elasticity of increased salience
of drinking is negative (-0.411) but not statistically significant
. . . the qualitative pattern in the price elasticities is largely
insensitive to our inclusion of these [state alcohol] policy
variables (Farrell et al. 2003, pp.129-30).
● According to the
results, alcoholic beverage taxes have no effect on alcohol
consumption. For the general population, taxes have no effect on
neither the number of drinks consumed nor binge drinking (Gius
2002, p. 80).
● The negative own
price effect for occasional and moderate drinkers is consistent
with the consumer behaviour but the insignificant effect for the
heavy drinkers is against intuition . . . the results are not
inconsistent with those found in Manning et al. (Harris 2006, p.
794).
● Both the
frequency and intensity of moderate drinking are sensitive to price
. . . At the extremes, heavy drinking by the most-informed
consumers is much more price elastic than moderate drinking, while
the estimated price elasticities of heavy drinking for the
least-informed consumers are not statistically significantly
different from zero (Kenkel 1996, pp. 306-07).
● The results
indicate that both light and heavy drinkers are much less price
elastic than moderate drinkers. Further, we cannot reject the
hypothesis that the very heaviest drinkers have perfectly price
inelastic demands (Manning et al. 1995, p. 123).
● Alcohol prices do
not affect mortality rates due to chronic liver diseases. Empirical
results in the study do not lend support to broad price-based
approaches to alcohol policy (Nelson 2015, p. 1).
●
All three models show a negative impact of current
distilled-spirits taxes on log cirrhosis mortality rates, although
the effect is not significant in Model 2 . . . Wine and beer tax
rates . . . are never significant predictors of cirrhosis mortality
(Ponicki and Gruenewald 2006, p. 936).
●
Logistic regression analyses were conducted to identify predictors
of heavy drinking . . . Neither degree of crowding nor the
discounting of drinks significantly contributed to the model
(Stockwell et al. 1993, pp. 1522-23).
● Price had
negative effects on the probability of heavy episodic drinking and
drinking and driving among heavy drinkers, but the effects were not
statistically significant (Stout et al. 2000, p. 408).
● However, after
adjustment for adult binge drinking, the association between tax
and youth drinking was attenuated and no longer statistically
significant [i.e., no direct effect] . . . We observed similar
findings when assessing the effect of adult binge drinking on the
relationship between tax and youth binge drinking (Xuan et al.
2013, p. 1717).
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Jon P. Nelson, Ph.D. – list of relevant
publications since 2006:
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Youth?” Contemporary Economic Policy, 24(3),
July 2006, 357-69.
“Reply to Siegel, et al.: Alcohol Advertising in
Magazines and Disproportionate Exposure,” Contemporary
Economic Policy, 26, July 2008a, 493-504.
“Distilled Spirits: Spirited Competition or Regulated
Monopoly?” in V. Tremblay & C. Tremblay (eds.),
Industry and Firm Studies (M.E. Sharpe, 2007), pp.
119-57.
“How
Similar are Youth and Adult Alcohol Behaviors? Panel Results for
Excise Taxes and Outlet Density,” Atlantic Economic
Journal, 36(1), March 2008b, 89-104.
“Effects
of Youth, Price, and Audience Size on Alcohol Advertising in
Magazines” (w/ D.J. Young), Health Economics, 17(4),
April 2008c, 551-56.
“Alcohol
Advertising Bans, Consumption, and Control Policies in Seventeen
OECD Countries, 1975-2000,” Applied Economics, 42(7),
March 2010a, 803-23.
“Alcohol, Unemployment Rates, and Advertising Bans:
International Panel Evidence, 1975-2000,” Journal of
Public Affairs, 10(1-2), February-May 2010b,
74-87.
“Measurement Problems in Assessing Adolescent
Exposure to Alcohol Advertising in Magazines,” Journal of
Adolescent Health, 46(4), April 2010c, 403-04.
“What is Learned from Longitudinal Studies of
Advertising and Youth Drinking and Smoking? A Critical
Assessment,” International Journal of Environmental
Research & Public Health, 7(3), March 2010d, 870-926. Open
Access at: http://www.mdpi.com.
“Alcohol
Marketing, Adolescent Drinking, and Publication Bias in
Longitudinal Studies: A Critical Survey using Meta-Analysis,”
Journal of Economic Surveys, 25(2), April 2011,
191-232.
“Alcohol
Marketing Policy: The Missing Evidence,” Addiction,
107 (9), Sep 2012, 1708-09.
“Not So
Fast! Evidence-Informed Alcohol Policy Requires a Balanced Review
of Advertising Studies,” in C.J. Pardun (ed.), Advertising
and Society: An Introduction, 2nd ed. (Wiley-Blackwell, 2013a),
pp. 87-95.
“National Minimum Drinking Age Act,” in
Consumer Survival: An Encyclopedia of Consumer Rights,
Safety, and Protection (ABC-CLIO, 2013b), pp.
663-65.
“Does
Heavy Drinking by Adults Respond to Higher Alcohol Prices and
Taxes? A Survey and Assessment,” Economic Analysis &
Policy, 43 (3), December 2013c, 265-91. Open Access at:
http://www.sciencedirect.com/science/article/pii/S0313592613500324
“Meta-Analysis of Alcohol Price and Income
Elasticities – with Corrections for Publication Bias,”
Health Economics Review, 3:17, July 2013d.
doi:10.1186/2191-1991-3-17.
Open Access
at: http://www.healtheconomicsreview.com/content/3/1/17.
“Robust
Demand Elasticities for Wine and Distilled Spirits: Meta-Analysis
with Corrections for Outliers and Publication Bias,”
Journal of Wine Economics, 8 (3), 2013e, 294-317.
doi:10.1017/jwe.2013.24.
“Estimating the Price Elasticity of Beer:
Meta-Analysis of Data with Heterogeneity, Dependence, and
Publication Bias,” Journal of Health Economics, 33
(1), January 2014a, 180-87.
“Alcohol
Affordability and Alcohol Demand: Cross-Country Trends and Panel
Data Estimates, 1975-2008,” Alcoholism: Clinical and
Experimental Research, 34 (4), April 2014b, 1167-75. doi:
10.1111/acer.12345.
“Economic Research Studies on Heavy Drinking and
Alcohol Prices: What do Systematic Reviews Demonstrate?”
Wine & Viticulture Journal, 29, July 2014c,
61-2.
“Gender
Differences in Alcohol Demand: A Systematic Review of the Role of
Prices and Taxes,” Health Economics, 23 (10), October
2014d, 1260-80.
“Reply to Ludbrook, Holmes and Stockwell: Gender
Differences in Alcohol Demand,” Health Economics, 23
(10), October 2014e, 1284-86.
“Binge
Drinking and Alcohol Prices: A Systematic Review of Age-Related
Results from Econometric Studies, Natural Experiments and Field
Studies,” Health Economics Review, 5:6, February
2015a. Open Access: doi 10.1186/s13561-014-0040-4.
“Reply to the Critics on ‘Binge Drinking and
Alcohol Prices,’” Health Economics Review, 6:6,
January 2016a. Open Access: doi
10.1186/s13561-016-0084-8.
“Alcohol
Prices and Mortality due to Liver Cirrhosis: Robust Regression
Results for the European Union, 2000-2010,” SAGE Open,
5 (2) April-June 2015b, 1-11. Open Access:
doi 10.1177/2158244015593118.
“Alcohol
Prices, Taxes, and Alcohol-Related Harms: A Critical Review of
Natural Experiments in Alcohol Policy for Nine Countries” (w/
A.D. McNall), Health Policy, 20 (3), March 2016b,
264-72.
“Economic Evidence Regarding Alcohol Price
Elasticities and Price Responses by Heavy Drinkers,”
Public Health Open J, 1 (2), Aug 2016c, 36-39. Open
access: http://dx.doi.org/10.17140/PHOJ-1-108
“What
Happens to Drinking when Alcohol Policy Changes? A Systematic
Review of Five Natural Experiments for Alcohol Taxes, Prices, and
Availability” (w/ A.D. McNall), European Journal of Health
Economics, 18 (4), April 2017, 417-34.
