Economics of Alcohol Control
Dates: 2013 – ongoing
Funding: World Health Organisation
Based on their experience in the Economics of Tobacco Control project, Corne van Walbeek and Evan Blecher were approached by the World Health Organisation to do a study on the economics of alcohol in South Africa. There are substantial overlaps between alcohol policy and tobacco policy, but also some significant differences. Both tobacco use and alcohol misuse carry significant health risks and negative externalities. For alcohol the negative effects are only apparent when there is excessive or risky drinking. A study on the demand for alcohol is complicated by the fact that there are numerous categories of alcohol (e.g. beer, wine, spirits and home-brew) which can act as substitutes for each other, whereas tobacco products are more homogenous.
The study aims to provide the WHO with a deeper understanding of the relationship between alcohol excise taxes, alcohol prices and alcohol consumption, for various categories. South Africa's experience with excise taxes on alcohol will be compared to experiences in countries with a similar level of development as South Africa. We aim to estimate the price elasticity of demand for various categories of alcohol, for various demographic groups. Depending on the outcomes of the study, the report might be used by the WHO to demonstrate that increasing the excise tax on alcohol is an effective way of reducing alcohol misuse and of raising additional revenue for government.
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Corne van Walbeek, Evan Blecher
Increasing the excise tax on tobacco products has proven to be a particularly effective way of reducing tobacco use. In this study, which is funded by the WHO South Africa Office, we consider the economics of alcohol policy in South Africa, focusing on the impact that increases in the excise tax could have on alcohol consumption. The study considers long-term trends in alcohol excise taxes, alcohol prices, alcohol consumption and the prevalence of alcohol use, broken down into the three main categories of alcohol, i.e. beer, wine and spirits. The study finds that, despite some increases in the past 20 years, the excise tax on alcohol is much lower in real terms than the peaks in the 1960′s and 1970′s. Furthermore, the study finds that an increase in the price of alcohol reduces alcohol consumption in general, but especially among the poorer half of the population and moderate drinkers. Click the link above to access the full report of 275 pages.
Alcohol Advertising in South Africa – A Trend and Comparative Analysis