Does Price Matter? The Effect of Decreased Price on Spirits Consumption in Switzerland
- 70 Downloads
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 wordsalcohol consumption spirit consumption taxation price changes longitudinal study
Unable to display preview. Download preview PDF.
- Bundesamt für Statistik (BFS) (1994). Swiss Health Survey — Initial Findings. Neuchâtel: Bundesamt für Statistik.Google Scholar
- Bundesamt für Statistik (BFS) (1998). Swiss Health Survey–Initial Findings. Neuchâtel: Bundesamt für Statistik.Google Scholar
- Bundesamt für Statistik (BFS) (2001). Statistisches Jahrbuch der Schweiz 2001. Zürich: Verlag Neue Zürcher Zeitung.Google Scholar
- 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
- 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
- Clements, K. W., & Selvanathan, S. (1991). The economic determinants of alcohol consumption. Australian Journal of Agricultural Economics, 35, 209–231.Google Scholar
- Cook, T. D., & Campbell, D. T. (1979). Quasi-Experimentation: Design and Analysis Issues for Field Settings. Chicago: Rand-McNally.Google Scholar
- 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
- 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
- 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
- Gruenewald, P. J. (1993). Alcohol availability and the ecology of drinkign behaviour. Alcohol Health and Research World, 17 (2), 39–45.Google Scholar
- Jöreskog, K. G., & Sörbom, D. (1993). PRELIS 2 User’s Reference Guide. Chicago, IL: SSI.Google Scholar
- Kenkel, D. S. (1993). Prohibition versus taxation: reconsidering the legal drinking age. Contemporary Policy Issues, 11 (3), 48–57.Google Scholar
- Laixuthai, A., & Chaloupka, F. J. (1993). Youth alcohol use and public policy. Contemporary Policy Issues, 11 (4), 70–81.Google Scholar
- Liang, K. Y., & Zeger, S. L. (1986). Longitudinal data analysis using generalized linear models. Biometrika, 73, 13–22.Google Scholar
- 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
- 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
- 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
- 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
- Plant, M. A., Single, E., & Stockwell, T. (Eds.) (1997). Alcohol: Minimising the Harm. What Works? London: Free Association Books Ltd.Google Scholar
- 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
- 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
- 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
- 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
- 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