Does Price Matter? The Effect of Decreased Price on Spirits Consumption in Switzerland

  • M. Kuo
  • J. -L. Heeb
  • G. Gmel
  • J. Rehm


Background. On July 1st, 1999, the spirits market in Switzerland was reformed based on the World Trade Organization (WTO) agreement. The tax reform, in addition to increased competition, has resulted in a 30–50% decrease in price for foreign spirits (liquor). The purpose of the present study is to examine whether decreased prices due to the tax reform and the liberalized spirits market in Switzerland have had an effect on spirits consumption, and whether the effect differs by demographic and other correlates.

Methods. The present study uses data from a longitudinal study on changes in alcohol consumption in Switzerland’s resident population. The baseline survey was conducted three months before the tax reform and the follow-up was conducted 28 months after the tax reform. A randomly selected sample of 4007 residents aged 15 years or older participated in the baseline survey and 73% in the follow-up survey. The data were obtained by computer-assisted telephone interview, including detailed questions on alcohol consumption, drinking habits, problem drinking, purchase of spirits and socio-demographic characteristics.

Results. Consumption of spirits increased after the price of spirits decreased. The increase in spirits consumption was consistent across sub-groups, with the exception of the group aged 60 or older. Moreover, the increase in spirits consumption persisted even after adjustment for significant correlates of spirits consumption. Apart from age, there was no evidence that the increase in spirits consumption differed between sub-groups as defined by sex, region, working status, education, smoking, drinking frequency, or average number of drinks.

Conclusions. The findings demonstrate that younger people are more affected by price than older persons. This study demonstrated that price should be considered an effective policy to reduce alcohol misuse and alcohol-related problems, especially among the younger population.

Key words

alcohol consumption spirit consumption taxation price changes longitudinal study 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Bundesamt für Statistik (BFS) (1994). Swiss Health Survey — Initial Findings. Neuchâtel: Bundesamt für Statistik.Google Scholar
  2. Bundesamt für Statistik (BFS) (1998). Swiss Health Survey–Initial Findings. Neuchâtel: Bundesamt für Statistik.Google Scholar
  3. Bundesamt für Statistik (BFS) (2001). Statistisches Jahrbuch der Schweiz 2001. Zürich: Verlag Neue Zürcher Zeitung.Google Scholar
  4. Chaloupka, F. J., Grossman, M., & Saffer, H. (1998). The effects of price on the consequences of alcohol use and abuse. In M. Galanter (Ed.), The Consequences of Alcoholism (Vol. Vol. 14, pp. 331–346). New York, NY: Plenum Press.Google Scholar
  5. Chaloupka, F. J., & Wechsler, H. (1996). Binge drinking in college: the impact of price, availability, and alcohol control policies. Contemporary Economic Policy, 14 (4), 112–124.Google Scholar
  6. Clements, K. W., & Selvanathan, S. (1991). The economic determinants of alcohol consumption. Australian Journal of Agricultural Economics, 35, 209–231.Google Scholar
  7. Coate, D., & Grossman, M. (1988). Effects of alcoholic beverage prices and legal drinking ages on youth alcohol use. Journal of Law and Economics, 31 (1), 145–171.CrossRefGoogle Scholar
  8. Cook, T. D., & Campbell, D. T. (1979). Quasi-Experimentation: Design and Analysis Issues for Field Settings. Chicago: Rand-McNally.Google Scholar
  9. Cooper, A. M., Sobell, M. B., Sobell, L. C., & Maisto, S. A. (1981). Validity of alcoholic’s self-reports: duration data. International Journal of the Addictions, 16 (3), 401–406.PubMedGoogle Scholar
  10. Edwards, G., Anderson, P., Babor, T. F., Casswell, S., Ferrence, R. G., Giesbrecht, N., et al. (1994). Alcohol Policy and the Public Good. New York: Oxford University Press.Google Scholar
  11. Gmel, G., Truan, P., & François, Y. (1999). Alcoholic beverage preferences and self-reported problems in Switzerland. Substance Use and Misuse, 34 (12), 1619–1645.PubMedGoogle Scholar
  12. Godfrey, C. (1997). Can tax be used to minimise harm? A health economist’s perspective. In M. A. Plant, E. Single & T. Stockwell (Eds.), Alcohol: Minimising the Harm. What Work’s? (pp. 29–42). London: Free Association Books.Google Scholar
  13. Greenfield, T. K. (2000). Ways of measuring drinking patterns and the difference they make: experience with graduated frequencies. Journal of Substance Abuse, 12 (1–2), 33–49.PubMedGoogle Scholar
  14. Grossman, M., Coate, D., & Arluck, G. M. (1987). Price sensitivity of alcoholic beverages in the United States: Youth alcohol consumption. In H. Holder (Ed.), Advances Abuse Prevention: Strategies for States and Communities. Greenwich CT: JAI.Google Scholar
  15. Gruenewald, P. J. (1993). Alcohol availability and the ecology of drinkign behaviour. Alcohol Health and Research World, 17 (2), 39–45.Google Scholar
  16. Her, M., Giesbrecht, N., Room, R., & Rehm, J. (1998). Implications of privatizing/deregulating alcohol retail sales: Projections of alcohol consumption in Ontario. Journal of Substance Abuse, 10 (4), 355–373.CrossRefPubMedGoogle Scholar
  17. Her, M., Giesbrecht, N., Room, R., & Rehm, J. (1999). Privatizing alcohol sales and alcohol consumption: evidence and implications. Addiction, 94 (8), 1125–1139.CrossRefPubMedGoogle Scholar
  18. Jöreskog, K. G., & Sörbom, D. (1993). PRELIS 2 User’s Reference Guide. Chicago, IL: SSI.Google Scholar
  19. Kenkel, D. S. (1993). Prohibition versus taxation: reconsidering the legal drinking age. Contemporary Policy Issues, 11 (3), 48–57.Google Scholar
  20. Laixuthai, A., & Chaloupka, F. J. (1993). Youth alcohol use and public policy. Contemporary Policy Issues, 11 (4), 70–81.Google Scholar
  21. Levy, D., & Sheflin, N. (1983). New evidence on controlling alcohol use through price. Journal of Studies on Alcohol, 44 (6), 929–937.PubMedGoogle Scholar
  22. Liang, K. Y., & Zeger, S. L. (1986). Longitudinal data analysis using generalized linear models. Biometrika, 73, 13–22.Google Scholar
  23. Manning, W. G., Blumberg, L., & Moulton, L. H. (1995). The demand for alcohol: the differential response to price. Journal of Health Economics, 14 (2), 123–148.CrossRefPubMedGoogle Scholar
  24. Midanik, L. T. (1988). Validity of self-reported alcohol use: a literature review and assessment. British Journal of Addiction, 83 (9), 1019–1030.PubMedGoogle Scholar
  25. Midanik, L. T. (1994). Comparing usual quantity/frequency and graduated frequency scales to assess yearly alcohol consumption: results from the 1990 US National Alcohol Survey. Addiction, 89 (4), 407–412.PubMedGoogle Scholar
  26. Morgenstern, H. (1998). Ecologic studies. In K. J. Rothman & S. Greenland (Eds.), Modern Epidemiology (2nd ed., pp. 459–480). Philadelphia, PA: Lippincott-Raven Publishers.Google Scholar
  27. Muthén, B. O., & Muthén, L. K. (2000). Development of heavy drinking and alcohol-related problems from ages 18 to 37 in a U.S. national sample. Journal of Studies on Alcohol, 61 (2), 290–300.PubMedGoogle Scholar
  28. Nordic Studies on Alcohol and Drugs (1999). Alcohol and the EU: On Policies, Drinking Patterns, Harm and Benefits (Vol. 16, English Suppl.). Helsinki: National Research and Development Centre of Welfare and Health.Google Scholar
  29. Österberg, E. (1995). Do alcohol prices affect consumption and related problems? In H. Holder & E. Griffith (Eds.), Alcohol and Public Policy (pp. 145–163). Oxford: Oxford University Press.Google Scholar
  30. Perkins, H. W. (2002). Surveying the damage: a review of research on consequences of alcohol misuse in college populations. Journal of Studies on Alcohol, Suppl. 14, 91–100.Google Scholar
  31. Plant, M. A., Single, E., & Stockwell, T. (Eds.) (1997). Alcohol: Minimising the Harm. What Works? London: Free Association Books Ltd.Google Scholar
  32. Rehm, J. (1998). Measuring quantity, frequency and volume of drinking. Alcoholism, Clinical and Experimental Research, 22 (2 Suppl), 4S–14S.PubMedGoogle Scholar
  33. Rehm, J., & Gmel, G. (2001). Aggregate time-series regression in the field of alcohol. Addiction, 96 (7), 945–954.CrossRefPubMedGoogle Scholar
  34. Rehm, J., Gmel, G., & Her, M. (2000). Alcohol consumption, time-series methodology and disease outcomes. Addiction, 95 (3), 352–353.PubMedGoogle Scholar
  35. Rehm, J., & Strack, F. (1994). Kontrolltechniken [Control techniques]. In T. Hermann & W. Tack (Eds.), Methodologische Grundlagen der Psychologie [Methodology to Control for Inferring Causality] (Vol. Enzyklopädie der Psychologie, Themen bereich B, Serie 1, Band 1, pp. 508–555). Göttingen: Hogreve.Google Scholar
  36. Schweizerische Fachstelle für Alkohol-und andere Drogenprobleme (SFA) (1999). Zahlen und Fakten zu Alkohol und anderen Drogen [Data and Facts about Alcohol and Other Drugs]. Lausanne: Schweizerische Fachstelle für Alkohol-und andere Drogenprobleme (SFA).Google Scholar
  37. Schweizerische Fachstelle für Alkohol-und andere Drogenprobleme (SFA) (2001). Zahlen und Fakten zu Alkohol und anderen Drogen [Data and Facts about Alcohol and Other Drugs]. Lausanne: Schweizerische Fachstelle für Alkohol-und andere Drogenprobleme (SFA).Google Scholar
  38. Skog, O.-J. (1985). The collectivity of drinking cultures: a theory of the distribution of alcohol consumption. British Journal of Addiction, 80, 83–99.PubMedGoogle Scholar
  39. Wagenaar, A. C., Maynard, A., Moskalewicz, J., West, D. S., Romanus, G., Giesbrecht, N., et al. (1999). Comments on Her et al.’s “Privatizing alcohol sales and consumption evidence and implications”. Addiction, 94 (8), 1141–1153.Google Scholar
  40. Wald, A. (1943). Test of statistical hypotheses concerning general parameters when the number of observations is large. Transactions of the American Mathematical Society, 54, 426–482.Google Scholar
  41. Wechsler, H., Kuo, M., Lee, H., & Dowdall, G. W. (2000). Environmental correlates of underage alcohol use and related problems of college students. American Journal of Preventive Medicine, 19 (1), 24–29.CrossRefPubMedGoogle Scholar
  42. Zeger, S. L., Liang, K. Y., & Albert, P. S. (1988). Models for longitudinal data: a generalized estimating equation approach. Biometrics, 44, 1049–1060.PubMedGoogle Scholar

Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • M. Kuo
    • 1
    • 5
  • J. -L. Heeb
    • 2
  • G. Gmel
    • 2
  • J. Rehm
    • 1
    • 3
    • 4
  1. 1.Addiction Research InstituteZurich UniversitySwitzerland
  2. 2.Swiss Institute for Alcohol and Drug ProblemsLausanneSwitzerland
  3. 3.Centre for Addiction and Mental HealthTorontoCanada
  4. 4.Public Health SciencesCanada
  5. 5.Department of Health and Social BehaviorHarvard School of Public HealthUSA

Personalised recommendations