Alcohol Excessive Consumption: Increasing Alcohol Taxes

The review was conducted on behalf of the CPSTF by a team of specialists in systematic review methods, and in research, practice, and policy related to preventing excessive alcohol consumption.

The systematic review included 73 studies.

• The studies looked at the relationship between either tax rates or total price and measures related to excessive alcohol consumption or its related harms.
• The effects of prices on consumption or other outcomes are often expressed as “elasticities,” that are defined as the expected percentage change in the outcome when the price increases by 1%. For example, an alcohol price elasticity of -0.50 would mean that the outcome of interest (e.g., alcohol consumption) would be expected to decrease by 5% for every 10% increase in price.

Alcohol price and per capita consumption

• Price elasticity of alcohol consumption (i.e., the expected percentage change in alcohol consumption when the price increases by 1%)
  • Beer consumption: -0.50 (18 studies)
  • Wine consumption: -0.64 (22 studies)
  • Spirits consumption: -0.79 (21 studies)
  • Total alcohol (ethanol) consumption: -0.77 (11 studies)
• Price and consumption by high school or college age youth
  • Six studies found consistent evidence that higher alcohol prices were associated with less youth drinking; three studies found mixed results (9 studies).

Alcohol price and alcohol-related harms

• Higher alcohol prices or taxes were consistently related to
  • Fewer motor vehicle crashes and fatalities (10 of 11 studies)
  • Less alcohol-impaired driving (3 of 3 studies)
  • Less mortality from liver cirrhosis (5 of 5 studies)
  • Less all-cause mortality (1 study)
• Effects also were demonstrated for measures of violence (3 studies), sexually transmitted diseases (1 study), and alcohol dependence (1 study).

The economic review included two studies that assessed the economic costs and benefits of alcohol tax intervention. All monetary values are reported in 2007 U.S. dollars.

• Cost-effectiveness was measured using disability-adjusted life-years (DALYs), which express both time lost due to premature death and time spent disabled by disease or accidents.
• Alcohol tax of 20% of the pretax retail price offered net cost savings (one study).
• Intervention costs were $482,956 per 1 million people per year and the average cost-effectiveness ratio was approximately $395 per DALYs averted, a good value for money based on the per capita income of included countries (one study)

• Do changes in alcohol prices differentially affect drinking behavior and health outcomes for important subgroups of the population, such as underage young people?
• What are the relative benefits of increasing taxes on all alcoholic beverages simultaneously, compared with selectively increasing taxes on specific beverage types? This research question should be considered in light of known differences in the beverage preferences of binge drinkers, historic changes in tax rates across beverage types, and the effect of inflation on real tax rates by beverage type.
• What is the impact of different approaches to taxing alcoholic beverages on excessive alcohol consumption and related harms? Specific emphasis should be placed on the impact of alcohol sales taxes, where taxes are calculated as a proportion of the total beverage price; the potential impact of standardizing alcohol taxes across beverage types based on alcohol content; and the potential impact of alcohol taxes levied by local governments on a per-drink basis in on-premise, retail alcohol outlets (i.e., tippler taxes).

• Most studies assessed total alcohol consumption at the societal level (i.e., per capita alcohol consumption). The design of these studies varied between countries.
  • Most studies conducted outside of the United States used interrupted time series designs. Alcohol taxes in other countries tend to be set at the national level, and as such, it is generally not possible to do intra-country comparisons.
  • In contrast, most of the U.S. studies used a panel study design, in which multiple states were assessed over time, allowing each to serve as a comparison for the others.
• The remaining studies assessed measures related to excessive drinking (e.g., the prevalence of underage or binge drinking) or alcohol-related harms, the most common being outcomes related to motor-vehicle crashes.

Elder RW, Lawrence B, Ferguson A, et al. The effectiveness of tax policy interventions for reducing excessive alcohol consumption and related harms. American Journal of Preventive Medicine. 2010;38(2):217-29.

Task Force on Community Services. Increasing alcohol beverage taxes is recommended to reduce excessive alcohol consumption and related harms. 2010;38(2):230-2.

Effectiveness Review

Analytic Framework [PDF – 150 kB
When starting an effectiveness review, the systematic review team develops an analytic framework. The analytic framework illustrates how the intervention approach is thought to affect public health. It guides the search for evidence and may be used to summarize the evidence collected. The analytic framework often includes intermediate outcomes, potential effect modifiers, potential harms, and potential additional benefits.

Effectiveness Review

No content is available for this section.

Economic Review

No content is available for this section.

Effectiveness Review

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Economic Review

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Implementation Resources

CDC’s High-Impact in 5 years initiative recommends increasing the unit price of alcohol based on evidence the strategy reduces excessive alcohol consumption and related harms within five years and has economic value.

Rural Health Information Hub, Prevention and Treatment of Substance Use Disorders Toolkit
This toolkit compiles information, resources, and best practices to support development and implementation of programs to prevent and treat substance use disorders in rural communities. Modules include program models, implementation and evaluation resources, and funding and dissemination strategies.

• Prevention Policies

The following databases were searched from their inception up to October 2007 to identify studies assessing the impact of changes for all interventions included in the Community Guide series of alcohol reviews: Econlit, PsycInfo, Sociology Abstracts, Medline, Embase, and EtOH (not available after 2003). The search yielded 6442 articles, books, and conference abstracts, of which 5645 were unique.

1) Alcohol Keywords

• (Alcoholic drink$ OR alcoholic beverage* OR alcohol OR liquor OR beer OR wine OR spirits OR drunk OR intoxicat$ OR alcoholic binge* OR binge drinking)

2) Keywords for interventions of interest (assume ORs between bullets) {Target intervention}

• ((day$ or hour$ or sale$) and (limit$ or sale$ or extend$ or restrict$ or trading)) {Restrictions on days and hours of sale}
  • (day OR hour OR “time of day” OR time) AND (sale* OR trading OR commerce) AND (limit OR restrict OR regulate)
• (tax or taxes or taxation or cost or costs$ or prices or price) {Increased alcohol taxes}
  • (tax*) AND (increase OR raise)
• (social and (host$ or liability or provider$ or provision)) {Social host liability}
  • (“social host” OR provider* OR provision) AND (liability OR responsibility)
• ((underage or minor or youth or young or teenage$) and licens$ and (enforcement or fee$ or driver$)) {License suspension/revocation for non-MV alcohol violations among underage drinkers}
  • (underage OR minor OR youth OR adolescent OR teen*) AND (“drivers license” OR) AND (suspension OR revocation OR revoke) AND (“non-mv alcohol violation” OR (“alcohol violation” NOT (driving OR “motor vehicle”))
• (privatiz$ or monopol$ or ((sale$ or distribut$ or industry) and (ban$ or strike$ or prohibition))) {Government monopolies on off-premise outlets}
  • (“off-premise”) AND (“government monopoly” OR government OR privatiz* OR monopoly) AND (sale* OR distribut* OR industry)
• (minimum age or drinking age or purchase age or legal age or MDA or MLDA or ((teen$ or adolescen$ or young or college$ or youth$ or student$ or underage$ or minor$) and (enforce$ or deterrence$ or avail$ or access$ or crackdown or ID or identification or compliance))) {Enhanced enforcement of laws prohibiting possession or consumption of alcohol by minors}
  • (underage OR minor OR youth OR adolescent OR teen*) AND (possess* OR consum* OR access*) AND (law* OR regulat* OR enforce* OR deter* OR crackdown OR complia*) AND (“minimum age” OR “drinking age” OR “purchase age” OR “legal age” OR “MDA” OR “MLDA”)
• (advertis$ or marketing or promotion$ or internet or product placement or billboard$ or sponsorship) {Limiting advertising exposure}
  • (advertis* OR market* OR promotion* OR internet OR www OR World Wide Web OR “product placement” OR billboard* OR sponsor* OR target*) AND (underage OR minor OR youth OR adolescent OR teen*) AND (limit OR reduc* OR restrict* OR regulat*)
• (compliance check$ or sting$ or decoy$ or purchase attempt or dram shop) {Enhanced enforcement of laws prohibiting provision of alcohol to minors}
  • (“dram shop” OR “on-premise” OR provider) AND (“compliance check*” OR “purchase attempt*” OR enforce*) AND (law* OR regulat* OR prohibit*) AND (underage OR minor OR youth OR adolescent OR teen*)
• (((manager$ or management or serv$ or clerk$ or seller$) and (liabilit$ or practice$ or training or beverage$)) or liquor liability) {Responsible beverage server programs/Dram shop liability}
  • (provider OR manage* OR serv* OR “dram shop” OR “on-premise” OR sale*) AND ((liabil* OR responsib*) OR (“responsible beverage server program*” OR training OR program*)
• (gas station or self service or ((outlet$ or store$ or bar or bars or establishment) and (density or densities or on-sale or off-sale or type or types or number$ or location$ or concentration or zoning))) {Outlet density and zoning restrictions}
  • (“gas station” OR store OR bar* OR establishment* OR sale*) AND (zon* OR restriction* OR regulat* OR law*) AND (dens*)
• (happy hour$ or liquor by the drink or ladies night or (drink$ and (special$ or discount$ or pric$)) { Decreasing promotional pricing}
  • (promot* OR special OR discount OR “happy hour” OR “ladies night”) AND (pric*) AND (decrease OR restrict* OR regulat* OR limit OR reduc*)

3) Exclusionary keywords

• (air and quality) or pollution
• methanol or methyl
• solvent$

Search for (1) AND (2), NOT (3)

Wagenaar AC, Maldonado-Molina MM, Wagenaar BH. Effects of alcohol tax increases on alcohol-related disease mortality in Alaska: time series analyses from 1976 to 2004. Am J Public Health 2009b;99:1464 70.

• Groups with less disposable income, such as underage drinkers, may be more sensitive to changes in alcohol prices than those with more disposable income.
• While raising alcohol taxes may provide an important source of revenue for governments, such tax increases may be resisted by some industry groups and consumers.
• Public support for higher alcohol taxes increases substantially when tax revenues are specifically directed to fund prevention and treatment programs instead of being used as an unrestricted source of general revenue.

Healthy People 2030

Healthy People 2030 includes the following objectives related to this CPSTF recommendation.

• Reduce the proportion of people under 21 years who engaged in binge drinking in the past month — SU-09
• Reduce the proportion of people aged 21 years and over who engaged in binge drinking in the past month — SU-10

Health Impact in 5 Years (HI-5)

HI-5 highlights community-wide approaches that have demonstrated 1) positive health impacts, 2) results within five years, and 3) cost effectiveness and/or cost savings over the lifetime of the population or earlier.

• Pricing Strategies for Alcohol Products