The role of health economics in alcohol policy

In a 2010 editorial, Doran and Jainullabudeen[1] outlined the potential role health economics can play in the development and implementation of alcohol policy. In particular, efficiency can be attained when the negative externalities due to alcohol consumption can be reduced and where the socially optimum level of alcohol is consumed. A socially optimum level can be thought of as one where the marginal cost of reducing associated harm is equal to the marginal benefit from reduced harm.[2] This optimum level requires an assessment of both supplyside factors (availability, marketing and price of alcohol) and demand-side factors (taste, willingness, preferences and income) and the interactions of these factors in minimizing alcohol misuse.[3

Can harms associated with high-intensity drinking be reduced by increasing the price of alcohol?

Introduction and Aims: Increasing the price of alcohol is consistently shown to reduce the average level of consumption. However, the evidence for the effect of increasing the price on high-intensity drinking is both limited and equivocal. The aim of this analysis is to estimate the effect of changes in price on patterns of consumption. Design and Methods: Self-reported patterns of alcohol consumption and demographic data were obtained from the Australian National Drug Strategy Household Surveys, conducted in 2001, 2004 and 2007. A pooled three-stage least-squares estimator was used to simultaneously model the impact of the price on the frequency (measured in days) of consuming no, low, moderate and high quantities of alcohol. Results: A 1% increase in the price of alcohol was associated with a statistically significant increase of 6.41days per year on which no alcohol is consumed (P≤0.049), and a statistically significant decrease of 7.30days on which 1-4 standard drinks are consumed (P≤0.021). There was no statistically significant change for high or moderate-intensity drinking. Conclusions: For Australia, and countries with a similar pattern of predominant high-intensity drinking, taxation policies that increase the price of alcohol and are very efficient at decreasing harms associated with reduced average consumption may be relatively inefficient at decreasing alcohol harms associated with high-intensity drinking. © 2012 Australasian Professional Society on Alcohol and other Drugs

Developing an alcohol policy assessment toolkit: Application in the western pacific

© 2014, World Health Organization. All rights reserved. Methods: We developed a quantitative tool - the Toolkit for Evaluating Alcohol policy Stringency and Enforcement (TEASE-16) - to assess the level of stringency and enforcement of 16 alcohol control policies. TEASE-16 was applied to policy data from nine study areas in the western Pacific: Australia, China excluding Hong Kong Special Administrative Region (SAR), Hong Kong SAR, Japan, Malaysia, New Zealand, the Philippines, Singapore and Viet Nam. Correlation and regression analyses were then used to examine the relationship between alcohol policy scores and income-adjusted levels of alcohol consumption per capita. Objective: To demonstrate the development and feasibility of a tool to assess the adequacy of national policies aimed at reducing alcohol consumption and related problems. Findings: Vast differences exist in how alcohol control policies are implemented in the western Pacific. Out of a possible 100 points, the nine study areas achieved TEASE-16 scores that ranged from 24.1 points for the Philippines to 67.5 points for Australia. Study areas with high policy scores - indicating relatively strong alcohol policy frameworks - had lower alcohol consumption per capita. Sensitivity analyses indicated scores and rankings for each study area remained relatively stable across different weighting schemes, indicating that TEASE-16 was robust. Conclusion: TEASE-16 could be used by international and national regulatory bodies and policy-makers to guide the design, implementation, evaluation and refinement of effective policies to reduce alcohol consumption and related problems

Methodological and statistical considerations in alcohol policy evaluation

The article discusses the application of the Toolkit for Evaluating Alcohol policy Stringency and Enforcement (TEASE-16) in several studies in the western Pacific region. Topics discussed include the analysis of the relationship between alcohol consumption and policy using a linear regression model, the inclusion of income as a determinant of alcohol consumption, and the usefulness of the toolkit in analyzing the level of stringency and enforcement of alcohol policies

The efficiency of a volumetric alcohol tax in Australia

Background: In Australia and elsewhere, fiscal measures such as alcohol taxation are a commonly used intervention and cost-effective strategy to reduce alcohol consumption and associated harm. However, alcohol taxation policies distort the market for alcohol, specifically increasing the marginal cost of alcohol. It is proposed that a volumetric tax, which taxes alcohol equally across all beverage types, is less distortive of consumer preferences and more efficient at reducing alcohol consumption than the current Australian tax model, where taxes are charged at varying amounts per litre of pure alcohol, depending on the beverage type. Objective: This paper quantifies the effect of four different alcohol taxation systems, relative to the current Australian system: two different types of volumetric taxation (deadweight loss neutral and tax revenue neutral); the recent strategy trialled in Australia of increasing the tax only on ready-to-drink alcoholic beverages (i.e. premixed spirits); and a tiered tax system, which may be more politically acceptable. Methods: A partial equilibrium approach was used to measure taxation revenue, consumer welfare and consumption in alcohol markets. Estimates of taxation revenue, consumer welfare and consumption were first calculated for 2008 and then compared with the four scenarios considered. Results: Relative to the previous alcohol taxation scheme in Australia, the taxation strategy that increased the tax solely on ready-to-drink alcoholic beverages increased taxation revenue by 479 million Australian dollars ($A), reduced pure alcohol consumption by 754 000 litres and increased the net deadweight loss of taxation by$A62 million. For a tax-neutral approach, for the same level of taxation revenue as is currently generated, a volumetric tax could substantially reduce the cost of taxation (as described by the net loss in consumer welfare) by $A177 million and reduce pure alcohol consumption by 468 000 litres. Under a deadweight loss-neutral scenario, for the same amount of deadweight loss generated from the previous taxation scenario, taxation revenue could be increased by$A1153 million, in addition to reducing pure alcohol consumption by 4 316 000 litres. A tiered taxation regime, as modelled here, could decrease pure alcohol consumption by 2 616 000 litres whilst increasing taxation revenue by $A1101 million. However, this scenario would also increase the deadweight loss of taxation by$A113 million. Conclusion: From these scenarios, it can be shown that, for the same tax revenue, consumer welfare can be reduced or, for the same level of loss to consumer welfare, taxation revenue can be increased. Both these scenarios result in a reduction of pure alcohol consumption

Is response to price equal for those with higher alcohol consumption?

Aims: To determine if taxation policies that increase the price of alcohol differentially reduce alcohol consumption for heavy drinkers in Australia. Design: A two-part demand model for alcohol consumption is used to determine the price elasticity of alcohol. Quantile regression is used to determine the price elasticity estimates for various levels of consumption. Setting: The study uses Australian data collected by the National Drug Strategy Household Survey for the years 2001, 2004 and 2007. Measurements: Measures of individual annual alcohol consumption were derived from three waves of the National Drug Strategy Household Survey; alcohol prices were taken from market research reports. Findings: For the overall population of drinkers, a 1 % increase in the price of alcohol was associated with a 0.96 % (95 % CI −0.35 %, −1.57 %) reduction in alcohol consumption. For those in the highest 10 % of drinkers by average amount consumed, a 1 % increase in the price of alcohol was associated with a 1.26 % (95 % CI 0.82 %, 1.70 %) reduction in consumption. Conclusions: Within Australia, policies that increase the price of alcohol are about equally effective in relative terms for reducing alcohol consumption both for the general population and among those who drink heavily. © 2014, Springer-Verlag Berlin Heidelberg

Estimated impacts of alternative Australian alcohol taxation structures on consumption, public health and government revenues

Objective: To examine health and economic implications of modifying taxation of alcohol in Australia. Design and setting: Economic and epidemiological modelling of four scenarios for changing the current taxation of alcohol products, including: replacing the wine equalisation tax (WET) with a volumetric tax; applying an equal tax rate to all beverages equivalent to a 10% increase in the current excise applicable to spirits and ready-to-drink products; applying an excise tax rate that increases exponentially by 3% for every 1% increase in alcohol content above 3.2%; and applying a two-tiered volumetric tax. We used annual sales data and taxation rates for 2010 as the base case. Main outcome measures: Alcohol consumption, taxation revenue, disability adjusted life-years (DALYs) averted and health care costs averted

The cost of hospitalisation for youth self-harm: Differences across age groups, sex, Indigenous and non-Indigenous populations

Objective: To report the comparative rates, average length of stay and cost per episode of hospital management for self-harm in three age cohorts: 15–19 years, 20–24 years and 25–29 years; by sex and indigeneity. Design, setting, participants: A secondary data analysis of the Australian Institute of Health and Welfare (AIHW) dataset between 1st January 2014 and 31st December 2014 inclusive. Main outcome measures: Cost per episode of hospitalised self-harm and rates by age group, sex and Indigenous status. Results: The rate of hospitalised self-harm among Australian youth was 254.0 per 100,000 population. This rate resulted in an annual cost to the healthcare system of AU$55 million or an average cost per episode of$4649 (95% CI $4488:$4810). Hospitalised self-harm was 21 times higher than the rate of suicide (11,820 episodes of hospitalised self-harm/564 suicides). Indigenous youth had on average a 1.4 times higher rate of hospitalised self-harm and 2.2 times higher rate of suicide than non-Indigenous counterparts. When controlling for age and sex, the average cost per episode was significantly lower for Indigenous youth compared to non-Indigenous youth, estimated marginal means $4538 and$4954, respectively (p < 0.001). Conclusions: Hospitalised self-harm among Australian youth resulted in a substantial cost to the healthcare system. This cost is only part of the overall burden associated with self-harm. The rate of hospitalised self-harm was significantly higher in Indigenous youth, but the associated cost per episode was significantly lower. © 2019, Springer-Verlag GmbH Germany, part of Springer Nature

Benefit cost analysis of three skin cancer public education mass-media campaigns implemented in New South Wales, Australia

This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.Public education mass media campaigns are an important intervention for influencing behaviour modifications. However, evidence on the effectiveness of such campaigns to encourage the population to reduce sun exposure is limited. This study investigates the benefits and costs of three skin cancer campaigns implemented in New South Wales from 2006-2013. This analysis uses Australian dollars (AUD) and 2010-11 as the currency and base year, respectively. Historical data on skin cancer were used to project skin cancer rates for the period 2006-2020. The expected number of skin cancer cases is derived by combining skin cancer rates, sunburn rates and relative risk of skin cancers due to sun exposure. Counterfactual estimates are based on sunburn exposure in the absence of the campaigns. Monetary values are attached to direct (treatment) and indirect (productivity) costs saved due to fewer skin cancer cases. Monetary benefits are compared with the cost of implementing the campaigns and are presented in the form of a benefit-cost ratio. Relative to the counterfactual (i.e., no campaigns) there are an estimated 13,174 fewer skin cancers and 112 averted deaths over the period 2006-2013. The net present value of these benefits is $60.17 million and the campaign cost is$15.63 million. The benefit cost ratio is 3.85, suggesting that for every $1 invested a return of$3.85 is achieved. Skin cancer public education mass media campaigns are a good investment given the likely extent to which they reduce the morbidity, mortality and economic burden of skin cancer. © 2016 Doran et al

Estimating the economic costs of skin cancer in New South Wales, Australia

Skin cancer is one of the most common cancers in the world. The increased incidence of skin cancer, combined with limited health care resources and tight budgetary conditions, has increased the importance of understanding the economic impact of skin cancer. This research estimates the economic cost of skin cancer in the Australian state of New South Wales