ALCOHOL ECONOMICS

See also: Behind Bars I and II See also: CASA Report Shoveling UP I and II
See also: Cost of Impaired Driving in Iowa
See also: Beer Taxes
See also: CDC http://www.cdc.gov/alcohol/index.htm

Find out how much excessive drinking costs your state from the Center for Disease Control and Prevention's High Cost of Excessive Drinking report. Use the A-Z Index at the top of the page, click on A, scroll down to Alcohol and it is a featured Item from the CDC. http://www.cdc.gov/alcohol/index.htm

Measuring the burden of alcohol, ALCOHOL ALERT, 87. An overview of alcohol's effect on life through out the world on health and the economy and its effect on different subpopulations, such as children and adolescents, college students, ethnic groups, and women. http://pubs.niaaa.nih.gov/publications/aa87/aa87.htm

Bouchery, E. E.; Harwood, H. J.; Sacks, J. J.; Simon, C. J.; Brewer. R. D.; "Economic costs of excessive alcohol consumption in the U. S.", AMERICAN JOURNAL OF PREVENTATIVE MEDICINE (2006), 41 (5): 516-524. Excessive alcohol is the leading preventable cause of death in the United States. Heavy drinking, binge drinking and excessive alcohol consumption continues to place a growing financial burden on Americans, which is not a welcomed sign in the current economic climate. Excessive drinking is estimated to cost the United States $223.5 billion each year, the latest government figures show. Much of the cost comes in the form of lost productivity due to missing work with hangovers. A new study by the Centers for Disease Control and Prevention shows that the cost of excessive alcohol consumption in 2006 - the latest year full data is available - at about $746 per person, or a total of almost $224 billion. A similar study in 1998, put the cost at $185 billion.

The cost of heavy alcohol consumption breaks down like this:
72% for lost productivity
11% for health care costs
9% for law enforcement and courts
6% for auto crashes by drunk drivers
For the sake of the study, the CDC defined excessive alcohol consumption. or heavy drinking as an average of more than one drink a day for women and an average of more than two drinks a day for men. It also included any alcohol consumption by pregnant women and underage drinkers.

The CDC study showed who pays the most of the binge drinking costs:
Local, state and federal governments bear 42% of the costs
Family members pay about 41.5% of the costs
Government agencies pay 61% of related health care costs
Drinkers and their family face 55% of the costs due to lost productivity.

"This research captures the reality that binge drinking means binge spending and, left unchecked, the burdensome cost of excessive drinking will only go up," said CDC Director Thomas R. Frieden, M.D. "Unfortunately the hangover is being passed on to all of us in the workplace and the health and criminal justice systems. The cure is responsible individual behavior combined with the successful policies we used to decrease smoking in the United States."

Alcohol-Related Disease Impact (ARDI) this program generates estimates of alcohol-related deaths and Years of Potential Life Lost (YPLL) due to alcohol consumption. One may view the data by state. http://nccd.cdc.gov/DPH_ARDI/default/default.aspx

Berke, E. M.; Tanski, S. E.; Demidenko, E.; Alford-Teaster, J.; Shi, X; Sargent, J. D,; "Alcohol retail density and demographic predictors of health disparities: a geographic analysis", AMERICAN JOURNAL OF PUBLIC HEALTH, 2010, 100(10): 1967-71. RESULTS: In urban areas, retail alcohol density had significant, nonlinear relationships with Black race, Latino ethnicity, poverty, and education, with slopes increasing substantially throughout the highest quartile for each predictor. In high-proportion Latino communities, retail alcohol density was twice as high as the median density. Retail alcohol density had little or no relation hip with the demographic factors if interest in suburban, large town, or rural census tracts. CONCLUSIONS: Greater density of alcohol retailers was associated with higher levels of poverty and higher proportions of Blacks and Latinos in urban census tracts. These disparities could contribute to higher morbidity in these geographic areas.

Califano, Joseph A., Jr.; "Teen tipplers: America's underage drinking epidemic," National Center on Addiction and Substance Abuse, Columbia University (February 26, 2002). "Children under the age of 21 drink 25 percent of the alcohol consumed in the U. S. Drinking beer is teen America's fatal attraction. Underage drinkers are a critical segment of the alcohol beverage market. Individuals who do not drink before age 21 are virtually certain never to do do: 82.8 percent of adults who drink had their first drink of alcohol before age 21. In 1998, they accounted for $27 billion of the $108 billion spent on alcohol, including as much as $15 billion on beer. Without underage drinkers, the alcohol industry, and the beer industry in particular, would suffer severe economic declines and dramatic loss of profits."

Cook, Philip J.; Moore, Michael J.; "The economics of alcohol abuse and alcohol control-policies," HEALTH AFFAIRS (Mar/Apr 2002), 21 (2):120-133. "Economic research as contributed to the evaluation of alcohol policy through empirical analysis of the effects of alcohol -control measures on alcohol consumption and its consequences. It has also provided an accounting framework for defining and comparing costs and benefits of alcohol consumption and related policy interventions, including excise taxes. The most important finding form the economics literature is that consumers tend to drink less ethanol, an have fewer alcohol-related problems, when alcoholic beverage prices are increased or alcohol availability is restricted. That set of findings is relevant for policy purposes because alcohol abuse imposes large 'external' costs on others. Important challenges remain, including developing a better understanding of the effects of drinking on labor-market productivity."

"Drinking and related problems decline when alcohol costs more", STATUS REPORT , 45 (6), June 19, 2010. (Review of 72 studies world wide.)The Task Force on Community Preventive Services, made up of US public health and prevention experts appointed by the Centers for Disease Control, conducted the review of papers published before July 2005 with support from the Centers for Disease Control and the U. S. Department of Health and Human Services. The task force recommends the best practices for public health interventions.

Nearly all of the 72 students found an inverse relationship between tax or price of alcohol and indices of excessive drinking or alcohol-related problems, including crashes. Results were consistent among alcohol types--wine, beer, and liquor--and across countries, time periods, and study designs. Studies that looked at underage drinkers also found convincing evidence that increasing the cost of alcohol reduces consumption and problem drinking. More research is needed to determine the benefits of increasing taxes on all alcohol at once compared with selectively raising taxes on specific beverages, the task force states.

Prior studies by the group found strong evidence that ignition interlocks, sobriety checkpoints, and the legal drinking age of 21 are effective interventions to combat alcohol-impaired driving.

"The effectiveness of tax policy interventions for reducing recessive alcohol consumption and related harms: by R. E. Elder et al., appears in the February 2010 issue of the AMERICAN JOURNAL OF
PREVENTIVE MEDICINE.

"Economic perspectives in alcoholism research," ALCOHOL ALERT (January, 2001), 51. (Economic analysis is used to estimate the costs of alcohol abuse and alcoholism. Based on 1992 data, researchers estimate 45 % of costs was borne by alcohol abusers and their families, 20% by the Federal Government, 18% by State and local government, 10 % by private insurance companies, and 6% by the victims of alcohol-related crashes. Higher taxes on alcoholic beverages have been linked to lower traffic fatality rates.) Address: http://pubs.niaaa.nih.gov/publications/aa51.htm

Foster, Susan E., Vaughan, Roger D., Foster, William H., "Alcohol consumption and expenditures for underage drinking and adult excessive drinking", JOURNAL OF THE AMERICAN MEDICAL ASSOCIATION, (2003) 289 (8): 989-995. The conclusion states: These data suggest that underage drinkers and adult excessive drinkers are responsible for 50.1% of alcohol consumption and 48.9% of consumer expenditure.

French, M. T., et al, "Easing the pain of an economic downturn: macroeconomic conditions and excessive alcohol consumption", HEALTH ECONOMICS, 12, September, 2011. Most research show that when the economy takes a downturn, overall excessive drinking and alcohol abuse decreases simply because people who do not have jobs do not have the money to engage in unhealthy behaviors such as heavy alcohol consumption. However, a new five-year study has found just the opposite to be true.

Problems associated with excessive alcohol consumption increases as economic conditions deteriorate, the researchers found. Health economists at the University of Miami and the University of Colorado looked at data from 2001 to 2005 to determine rates of binge drinking, alcohol abuse and alcohol dependence. They compared these rates with the rates of unemployment in the state.

The researchers found that as state unemployment rates rise, drinkers are:
-- likely to have more binge drinking day
-- more likely to drive while intoxicated
-- more likely to engage in problematic drinking.
Surprisingly, the researchers found that this increase in drinking held true for employees who still had their jobs. "The way we explaining this is even though employed individuals have a job, the could be affected psychologically (e.g., fear of losing their job) from an economic downturn, leading the have more thinking days and drive under the influence episodes as the State-level unemployment rates increases," says lead researcher Michael T. French.

Other findings of the study include:
-- the increase in drinking was true for all population groups
-- Blacks and those aged 18 to 24 showed the greatest increases in binge drinking"
-- people who were married and had children were less likely to increase drinking
-- those with higher education levels and income levels were more likely to binge drink.

Grubesic, T. H.; Pridemore, W. A.; Williams, D. A.; Phillip-Tabb, L.; "Alcohol outlet density and violence: the role of risky retailers and alcohol-related expenditures", ALCOHOL AND ALCOHOLISM, 48(5): 613-9. RESULTS: The strong and positive association between alcohol outlet density and violence remained after controlling for alcohol expenditures and the density of other retailers. CONCLUSION: Findings support the concept that off-premise alcohol outlets in the neighborhood environment may impact health and social outcomes. The positive outlet-violence association in the face of these controls means it is not an association due solely to alcohol availability or to retail density. It also suggests that there is something unique about alcohol outlets or their density that make them crime generators and links them to violence.

Hingson, R,; Heereen, T.; Zakocs, R.; "Age of drinking onset and involvement in physical fights after drinking." PEDIATRICS (2001), 108 (4): 872-877p. ("Persons who began drinking before age 14 were at least 3 times more likely than those who did not drink until they were over 21 to experience diagnosable alcohol dependence during their life and people who started drinking at an earlier age drink heavily with greater frequency during both adolescence and adulthood. Each year, of 11.1 million victims of violent assaults in the United States, 24% believed the perpetrator had been drinking. Roizen has estimated 37% of assault offenders, 60% of sexual offenders, 57% of men and 27% of women involved in marital violence, and 13% of child abusers had been drinking at the time of the event. Penanen reported 42% of violent crimes reported to the police involved alcohol. According to the Bureau of Justice Statistics, 40% of persons convicted of homicide and 24% of victims had been drinking at the time of the event."

Hingson, R.; Heeren, T.; Jamanka, A; Howland, J.; "Age of drinking onset and unintentional injury involvement after drinking," JOURNAL OF THE AMERICAN MEDICAL ASSOCIATION, (2000), 284 (27): 1527-1533. Drinking onset at ages younger than 21 years is associated with having experienced alcohol-related injuries. One third of of deaths due to unintentional injury in the United States are estimated to be alcohol related. Strategies to delay the age persons begin drinking, such as the minimum legal drinking age of 21 years, have been found to reduce drinking, alcohol-related traffic deaths, and deaths from other unintentional injuries among persons younger than 21 years.

Lee, Michael H.; Mello, Michael J.; Reinert, Steven; "Emergency department charges for evaluating minimally injured alcohol-imparied drivers", ANNALS OF EMERGENCY MEDICINE (2007), 54 (4): 593-599. "The literature on the costs of treating alcohol-impaired motor vehicle crash victims is largely based on inpatient data. Less is known about who are discharged home. Our objective is to measure the difference in charges and length of stay between alcohol-impaired and non impaired drivers in this populations. This was a retrospective study of charts and billing data for all drivers in motor vehicle crashes, aged 21 to 65 years, treated at an urban Level I trauma center in 2005 and discharged home from the ED. Patients were divided into alcohol-positive and -negative groups according to alcohol level, documentation of recent alcohol use, or clinical intoxication, itemized charges were tabulated and conspired across groups. Of 1,618 eligible patients, median charges were higher for alcohol-positive patients by $4,538 (95% confidence interval [Cl] $2,755 to $5,665). Imaging was 69% of the charge differential because of a higher frequency of imaging (91% versus 70%) and more expensive studies (median difference $2,464, 95% Cl $1,507 to $3,4000) for alochol-positive patients. Median length of stay was higher for alcohol-positive patients by 3.3 hours (95% CL 2.7 to 4.1 hours). When stratified by trauma-protocol triage destination, median charges were higher for alcohol-positive verses -negative patients in non-critical care beds by $2,229 (95% of CL $1,039 50$2,693). For patients triages to critical care beds, the difference in charges was only $132 (95% Cl - $1,677 to $1, 233). Conclusion: The presence of alcohol substantially increase charges and length of stay for ED evaluations of injured drivers discharged home, especially for patients who were triaged to non-critical care beds. The magnitudes are striking for this minimally injured population and represent an underreported burden of alcohol-impaired driving.

Mair, C,; Gruenewald, P. J.; Ponicki, W. R.; Remer, L.; "Varying impacts of alcohol outlet densities on violent assaults: explaining differences across neighborhoods", JOURNAL OF STUDIES ON ALCOHOL, (2013); 74(1): 50-8. Groups of potentially violent drinkers may frequent areas of communities with large numbers of alcohol outlets, especially bars, leading to greater rates of alcohol-related assaults. This study assessed direct and moderating effects of bar densities on assaults across neighborhoods. We analyzed longitudinal population data relating alcohol outlet densities (total outlet density, proportion bars/pubs, proportion off-premisis outlets) to hospitalization for assault injuries in California across residential ZIP code areas from 1995 through 2008 (23,213 space-time units). Because few ZIP codes were consistently defined over 14 years and these units are not independent, corrections for unit misalignment and spatial autocorrection were implemented using Bayesian space-time conditional autoregressive models. Assaults were related to outlet densities in local and surrounding areas, the mix of outlet types, and neighborhood characteristics. The addition of one outlet per square mile was related to a small 0.23% increase in assaults. A 10% greater proportion of bars in ZIP code was related to 7.5% greater assaults, whereas a 10% greater proportion of bars in surrounding areas was related to 6.2% greater assaults. The impacts of bars were much greater in areas with low incomes and dense populations. The effect of bar density on assault injuries was well supported and positive, and the magnitude of the effect varied by neighborhood characteristics. Posterior distributions from these models enabled the identification of locations most vulnerable to problems related to alcohol outlets.

Miller, T. R.; Lestina, D. C.; Spicer, R. S.; "Highway crash costs in the United States by driver age, blood alcohol level, victim age, and restraint use," ACCIDENT ANALYSIS AND PREVENTION (1998), 30 (2): 137-150. (Notable findings are: (1) crash costs of novice drivers are high enough to yield preliminary benefit-cost ratios around 4-8 for a provisional licensing system that restricts driving after midnight and 11 for zero alcohol tolerance for young divers with violators receiving a 6-month suspension; (2) the cost to people other than the intoxicated driver per mile driven at BACs of 0.08-0.099% exceed the value of driver mobility; (3) the safety costs of drunk driving appear to exceed $5.80 per mile, compared with $2.50 per mile driven at BACs of 0.08-0.099%, and $0.11 per mile driven sober; (4) highway crashes cause an estimated 3.2% of U. S. medical spending, including more than 14% of medical spending for ages 15-24; (5) ignoring crash-involved occupants whose restraint use is unknown, the 13% of occupants who police reported were traveling unrestrained accounted for an estimated 42% of the crash costs; and (6) if these unrestrained occupants buckled up, the medical costs of crashes would decline by an estimated 18% [almost $4 billion annually] and comprehensive costs by 24%.)

Miller, Ted R.; Levy, David T.; Spicer, Rebecca S.; Taylor, Dexter M.; "Societal costs of underage drinking", JOURNAL OF STUDIES ON ALCOHOL (2002), 67: 519-528. Underage drinking accounted for at least 16% of alcohol sales in 2001. It led to 3,170 deaths and 2.6 million other harmful events. The estimated $62.9 billion bill (relative SE+ 18.5%) included $5.4 billion in medical costs, $14.9 billion in work loss and other resource costs, and $41.6 billion in lost quality of life, which accounted for 67% of total costs, required challenging indirect measurement. Alcohol-attributable violence and traffic crashes dominated the costs. Leaving aside quality of life, the societal harm of $1 per drink consumed by an underage drinker exceeded the average purchase price of $0.90 or the associated $0.10 in tax revenues. Youth drinking behaviors merit the same kind of serious attention as alcohol and illicit drugs.

Muthen, Bengt O.; Muthen, Linda K.; " The development of heavy drinking and alcohol-related problems from ages 18 to 37 in a U. S. national sample," JOURNAL OF STUDIES ON ALCOHOL (2000), 81 (2): 290-300. " N=7859 of the National Longitudinal Survey of Youth (NLSY). Results: A key finding is that dropping out of high school has no effect on alcohol-related problems for individuals in the mid-twenties, but is associated with significantly increased levels of alcohol-related problems for individuals in their mid thirties, in contrast, going on to college is associated with lower levels of heavy drinking when individuals reach their late twenties and their thirties. Strong gender and ethnicity effects seen in the twenties diminish when individuals reach their thirties. Conclusions: The trajectory analysis expands the knowledge of problematic alcohol development for individuals in their late twenties and thirties. The increasing detrimental effect of dropping out of high school up to the age 37 endpoint of the study raises questions about the effects in later life of dropping out of high school."

Sacks, J. J.; Roeber, J.; Bouchery, E. E.; Gonzales, K.; Chaloupka, E. J.; Brewer, r. D; "State costs of excessive alcohol consumption, 2006", AMERICAN JOURNAL OF PREVENTIVE MEDICINE (2013) Oct; 45(4): 475-85. Excessive alcohol consumption is responsible for an average of 80,000 deaths in the U. S. each year and cost $223.5 billion ($1.90/drink) in 2006. Comparable state estimates of this cost are needed to help inform prevention strategies. The goal of this study was to estimate the economic cost of excessive drinking by state for 2006. From December 2011 to November 2012, an expert panel developed methods to allocate component costs from the 2006 national estimate to states for (1) total; (2) government; (3) binge drinking; and (4) underage drinking costs. Differences in average state wages were used to adjust productivity loses. In 2006, the median state cost of excessive drinking was $2.9 billion (range: $31.9 billion [California] to $419.6 million [North Dakota]; the median cost per drink, $1.91 (range $2.74 [Utah] to $0.88 [New Hampshire];t he median per capita cost $703 (range: $1662 [District of Columbia] to $578 [Utah]. A median of 42% of state costs were paid by government (range: 45.0% [Utah] to 37.0% [Mississippi]. Binge drinking was responsible for a median of 76.6% of state costs (range: 83.1% {Louisiana] to 71.6% [Massachusetts]; underage drinking, a median of 11.2% of state costs (range 20.0% [Wyoming] to 5.5% [District of Columbia]) Excessive drinking cost states a median of $2.9 billion in 2006. Most of the costs were due to binge drinking and about $2 of every $5 were paid by government. The Guide to Community Prevention Services has recommended several evidence-base strategies-including increasing alcohol excise taxes, limiting alcohol outlet density, and commercial host liability-that can help reduce excessive alcohol use that the associated economic costs.

"Shoveling up II: The Impact of Substance Abuse on Federal, State and Local Budgets". National Center on Addiction and Substance Abuse at Columbia University (New York, New York). May 2009.

Key 2005 findings of the report are:
For every dollar federal and state governments spent to prevent and treat substance abuse and addictions, they spend $59.83 in public programs shoveling up its wreckage.

If substance abuse and addiction were its own state budge category, it would rank second just behind spending on elementary and secondary education.

If substance abuse and addiction were its own budget category at the federal level, it would rank sixth behind social security, national defense, income security, Medicare and other health programs including the federal share of Medicaid.

Shimotsu, S.T.; Jones-Webb, R. J.; MacLehose, R. F.; Nelson, T. F.; Foster, J. L.; Lytle, L. A.; "Neighborhood socioeconomic characteristics, the retail environment, and alcohol consumption: a multilevel analysis", DRUGS AND ALCOHOL DEPENDENCE 132(3): 449-56, RESULTS: Retail mix was associated with binge drinking. Individuals living in census tracts with only liquor stores had a 46% higher risk of binge drinking and individuals living in census tracts with food stores only after controlling for demographic and lifestyle factors. CONCLUSION: Census tract characteristics such as retail mix may partly explain variability in drinking behavior. Future research should explore the mix of stores, not just the over-concentration of liquor stores in census tracts.

 

updated 12/16/16