Economic Burden of Alcohol Misuse in the United States National Institute on Alcohol Abuse and Alcoholism NIAAA

cost of alcohol

Over the past three decades, economists and others have devoted considerable effort to assessing the impact of alcoholic-beverage taxes and prices on alcohol consumption and its related adverse consequences. Federal and State excise taxes have increased only rarely and, when adjusted for inflation, have declined significantly over the years, as have overall prices for alcoholic beverages. Likewise, price increases can help reduce the risk for adverse consequences of alcohol consumption and abuse, including drinking and driving, alcohol-involved crimes, liver cirrhosis and other alcohol-related mortality, risky sexual behavior and its consequences, and poor school performance among youth. All of these findings indicate that increases in alcoholic-beverage taxes could be a highly effective option for reducing alcohol abuse and its consequences.

These investigators failed to detect a significant relationship between tax rates and drinking-and-driving rates. Likewise, Dee (1999) and Young and Likens (2000) found that there was little relationship between beer taxes and motor-vehicle fatalities, and the significance of the relationship was very sensitive to the specification of regression models. As one explanation for these inconsistencies, Mast and colleagues (1999) argued that the minimum legal drinking ages had been higher in the later years of data collection, which means that beer taxes had become a smaller part of the “full price” of teen drinking. Another potential explanation comes from the distinction between alcohol-related and non–alcohol-related traffic fatalities.

Estimates indicate that from 1951 to 2009, the average real State beer tax has fallen from almost 42 cents per gallon to just over 11 cents per gallon (see figure 2) (Beer Institute 2009). For the two cost indicators (Int$ per adult; % GDP) and separately for the total costs, and the direct and indirect costs, weighted means were calculated to estimate average costs across all studies. The variation around point estimates is given by 95% confidence intervals (CIs) based on the standard error. Cluster effects were assessed through intraclass correlation coefficients (ICC) of random intercept regression models using the R packages lmer [18] and performance [19].

About 15% of the entire national health care budget is spent on treating conditions related to substance abuse, including alcohol. Lost productivity, accidents, injuries, illnesses, property damage, violence and higher utilization of health, social and criminal justice systems contribute to this significant financial burden. These figures does not include the inestimable cost of human suffering… shattered families, unmet potentials and premature deaths.

Are there other options for people with limited financial resources?

Second, we summarized how many of the possible cost categories at this level were considered in each study, weighted by the relative contribution john joseph kelly amy carter of each category (calculated in the first step). By repeating this procedure, we accounted for the inclusion of all relevant cost categories at each level for each study. Several studies have addressed the effects of alcohol prices on the drinking behaviors of youths and young adults.

cost of alcohol

Health risks of alcohol use

This study not only summarized the total economic costs of alcohol consumption but also systematically quantified the contribution of various key cost components. Furthermore, this study is the first to overcome the limitations of previous reviews (e.g. Rehm et al. and Thavorncharoensap [8, 9]) related to methodological differences in cost estimation, thus eliminating a key barrier to compare costs across studies and countries. Alcohol use has been identified as a major risk factor for burden of disease [1–3], leading to the introduction of reduction goals in major UN and other international frameworks, such as the Sustainable Development Goals [4, 5]. However, alcohol consumption differs from many other risk factors, as attributable health burden is not restricted to the drinker alone but also extends to others, including those who have abstained from alcohol during their lifetime (e.g. via drunk driving or maternal alcohol consumption [6]).

Pogue and Sgontz (1989) showed that the “best-guess” estimate based on their model was 51 percent of the net price of the beverage (i.e., price excluding tax), whereas Kenkel (1996) estimated the optimal tax should be around 106 percent of the net price. Two other studies (Manning et al. 1989; Saffer and Chaloupka 1994) suggested that the excise tax rates during their study period would have had to be doubled to reach the optimal level. Given that State and Federal taxes generally have not kept pace with inflation since these studies were done (see figures 1 and ​and2),2), the “optimal” tax likely would have to be even higher today. In addition to tax-related polices, several other regulations also may directly or indirectly affect the prices of alcoholic beverages. These options include, but are not limited to, regulations on wholesale and retail distribution, bans on price-related promotions, and (targeted) minimum-pricing policies.

Calculation of Costs Attributable to Alcohol Use

These strategies can help communities create social and physical environments that encourage drinking less alcohol. Use of these strategies can reduce binge drinking and related outcomes, such as motor vehicle crashes, injuries, violence, and sexually transmitted infections. Given the limited comparability of cost studies and the implications discussed above, we suggest that funding for future cost-of-illness studies should be tied to adhering to methodological standards, such as imputing cost categories to achieve better comparability between studies [13, 14]. Such an approach would not only further facilitate better comparability between countries but would also allow for benchmarking between countries, which is one of the major methodologies used to improve health care systems (e.g. Bennett et al. [56] james anderson author for the area of non-communicable disease). It would also take away one of the major and repeated criticisms of cost studies [55], which we have addressed in this contribution.

However, the States’ ability to defend themselves against such legal challenges has been hampered by limited published evidence on the effects of these policies on alcohol prices, consumption, and related consequences of drinking. In contrast to previous reviews on the economic burden of alcohol use, we provide several novel insights. Any study seeking to estimate the economic burden from alcohol use will be informed by previous work, with a focus on studies that were conducted in the same location using similar data sources. For example, if governments mandate researchers to update previous estimates (see, for example, the paper by the Scottish Government [35]), changes to the estimation method ought to be kept to a minimum in order to allow for comparison of costs over time. Thus, such circumstances could explain why the same methodological approaches are maintained, even if they are incomplete, while guideline recommendations are not considered.

Several studies have explored the effects of prices of alcoholic beverages on schooling, using both extensive (i.e., education attainment) and intensive (i.e., performance in school) measures. Two analyses using data from the National Longitudinal Survey of Youth have shown that higher alcohol taxes led to increases in high-school graduation liquor storage ideas and post–high-school education attainment (Cook and Moore 1993b; Yamada et al. 1996). Most studies in this field have used fatal or nonfatal motor-vehicle crashes as a proxy for drinking and driving, because alcohol frequently is involved in these crashes.

In summary, non–tax-related State regulations that may directly or indirectly affect alcohol prices, drinking, and its consequences have been eroded in recent years, in part because of limited empirical evidence on their impact. The resulting further relaxation of these types of State regulations can contribute substantially to additional reductions in the real prices of alcoholic beverages, increased drinking, and greater alcohol-related harm. Studies addressing these issues are warranted and will greatly enhance understanding of the impact of changes in these policies on prices of alcoholic beverages. In recent years, some large alcoholic-beverage retailers have filed a couple of lawsuits against these non–tax-related State regulations over their perceived anticompetitive effects. For example, in Maryland, a large regional retailer has challenged the State’s ban on quantity discounts for wine and spirits at the wholesale level and the related price post-and-hold requirements (TFWS vs. Schaefer et al.) (Chaloupka 2010). In both cases, the States have adopted a defense based on the 21st Amendment to oppose these legal challenges, arguing that the regulations were consistent with the State public health interests by reducing excessive drinking.

Online tools such as an alcohol spending calculator can be helpful in seeing how much you may be spending by drinking daily. For example, if you drink 7 days a week and 5-6 beers a day at around $24 for a 12 pack of domestic beer, you’d be spending around $120 on beer alone in a week. Or $480 a month and $5,760 a year—which would not even account for the times you go out and drink at bars and restaurants. It may also begin to affect children as they may experience neglect or physical or emotional abuse from a parent struggling with alcoholism. This can range from missed events, such as soccer games or birthday parties, to verbal or physical violence at home. Family members dealing with alcoholism may also be less fully present in their day-to-day due to frequent hangovers or other adverse effects that may cause them to disengage.

  1. These strategies can help communities create social and physical environments that encourage drinking less alcohol.
  2. The amount you could be saving each year by not drinking could mean a new car, vacation with your loved ones, or a safety net used for unexpected expenses in the future.
  3. Adjusting for omission of cost components, the economic costs of alcohol consumption were estimated to amount to 1306 Int$ per adult (95% CI 873–1738), or 2.6% (95% CI 2.0–3.1%) of the GDP.
  4. First, the decline in drinking levels and attributable burden in many high-income countries [41, 42]; second, a lower study quality, i.e. exclusion of relevant cost components in more recent studies; and third, overproportional increases in the GDP relative to alcohol-attributable costs.

There are also financial downsides to regular drinking, especially if one has a habit of drinking frequently and/or in large quantities. We decided to take a closer look at how United States cities compare when it comes to drinking habits and the cost of these over a lifetime. To do so, we first looked at City-Data for the number of drinks each city’s inhabitants drink in a week on average. Using CDC data on the average life expectancy in each state, we then found the number of drinks consumed over a lifetime on average. Finally, we used Expatistan to find the average cost of alcoholic drinks in each city in order to determine the cost of drinking over various periods of time, including a full lifetime (age 21 and up).