Social and Health Effects of Changes in Alcohol Prices: Findings of a Research Collaborative

BACKGROUND: Scientific reviews have documented that increasing alcohol taxes reduces alcohol consumption and related problems. This CDC-funded research collaborative, comprising four institutions, conducted evaluation and translational research to complement the existing scientific evidence, with four complementary study objectives: 1) to evaluate the short-term health impact of changes in state alcohol prices; 2) to model the employment effects of changes in state alcohol prices; 3) to model the individual-level financial impact of changes in state alcohol prices (i.e., who pays the bulk of the tax); and 4) to perform comparative case study research on events leading to alcohol tax changes in three states.

 METHODS: A team from the University of Florida used a time-series, quasi-experimental design to assess the short-term impact of tax increases and decreases in Illinois and Massachusetts. Using a regional macroeconomic simulation model, a team from the University of Illinois at Chicago estimated the employment impact of tax-induced reductions in drinking. Researchers at Boston Medical Center modeled economic impacts of various per-drink tax rates on individuals, including excessive drinkers vs. non-excessive drinkers and by socio-economic demographics (e.g., age, sex, race). The coordinating team at Johns Hopkins Bloomberg School of Public Health performed comparative case study research on events leading to alcohol tax changes in Illinois, Massachusetts, and Maryland, including content analyses of media coverage, document retrieval and analysis, and key informant interviews.

 RESULTS: Chlamydia and gonorrhea rates decreased after the September 1, 2009 increase in Illinois’ alcohol excise tax. The largest effects were found among Blacks, where chlamydia decreased 15% and gonorrhea decreased 25%, and 25-29 year olds, where chlamydia decreased 22% and gonorrhea decreased 30%. While higher alcohol taxes do result in fewer jobs in the alcohol industry, these reductions are more than offset by job gains in other sectors, so that there is a net increase in overall employment as a result of increased taxes. Price increases of 5, 10, and 25 cents per drink are overwhelmingly shouldered by excessive drinkers, those employed, and those in higher income brackets. Tax changes may occur through popular organizing or through the initiatives of a single or small group of policy makers. Media coverage and framing play key roles in alcohol tax campaigns.

 CONCLUSIONS: Alcohol tax increases protect health, promote job creation, and target excessive more than moderate or non-drinkers.  Recent state experiences can instruct efforts to implement alcohol taxes as a public health measure.