The relationship between alcohol taxes and binge drinking

Evaluating new tax measures incorporating multiple tax and beverage types

Ziming Xuan, Frank J. Chaloupka, Jason G. Blanchette, Thien H. Nguyen, Timothy C. Heeren, Toben F. Nelson, Timothy S. Naimi

Research output: Contribution to journalArticle

17 Citations (Scopus)

Abstract

Aims: U.S. studies contribute heavily to the literature about the tax elasticity of demand for alcohol, and most U.S. studies have relied upon specific excise (volume-based) taxes for beer as a proxy for alcohol taxes. The purpose of this paper was to compare this conventional alcohol tax measure with more comprehensive tax measures (incorporating multiple tax and beverage types) in analyses of the relationship between alcohol taxes and adult binge drinking prevalence in U.S. states. Design: Data on U.S. state excise, ad valorem and sales taxes from 2001 to 2010 were obtained from the Alcohol Policy Information System and other sources. For 510 state-year strata, we developed a series of weighted tax-per-drink measures that incorporated various combinations of tax and beverage types, and related these measures to state-level adult binge drinking prevalence data from the Behavioral Risk Factor Surveillance System surveys. Findings: In analyses pooled across all years, models using the combined tax measure explained approximately 20% of state binge drinking prevalence, and documented more negative tax elasticity (-0.09, P=0.02 versus -0.005, P=0.63) and price elasticity (-1.40, P<0.01 versus -0.76, P=0.15) compared with models using only the volume-based tax. In analyses stratified by year, the R-squares for models using the beer combined tax measure were stable across the study period (P=0.11), while the R-squares for models rely only on volume-based tax declined (P<0.01). Conclusions: Compared with volume-based tax measures, combined tax measures (i.e. those incorporating volume-based tax and value-based taxes) yield substantial improvement in model fit and find more negative tax elasticity and price elasticity predicting adult binge drinking prevalence in U.S. states.

Original languageEnglish (US)
Pages (from-to)441-450
Number of pages10
JournalAddiction
Volume110
Issue number3
DOIs
StatePublished - Mar 1 2015

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Binge Drinking
Taxes
Beverages
Elasticity
Alcohol Drinking
Alcohols
Behavioral Risk Factor Surveillance System
Proxy
Information Systems

Keywords

  • Ad valorem tax
  • Alcohol control
  • Alcohol tax
  • Binge drinking
  • Elasticity
  • Excise tax
  • Harm reduction
  • Prevention
  • Tax structure

Cite this

The relationship between alcohol taxes and binge drinking : Evaluating new tax measures incorporating multiple tax and beverage types. / Xuan, Ziming; Chaloupka, Frank J.; Blanchette, Jason G.; Nguyen, Thien H.; Heeren, Timothy C.; Nelson, Toben F.; Naimi, Timothy S.

In: Addiction, Vol. 110, No. 3, 01.03.2015, p. 441-450.

Research output: Contribution to journalArticle

Xuan, Ziming ; Chaloupka, Frank J. ; Blanchette, Jason G. ; Nguyen, Thien H. ; Heeren, Timothy C. ; Nelson, Toben F. ; Naimi, Timothy S. / The relationship between alcohol taxes and binge drinking : Evaluating new tax measures incorporating multiple tax and beverage types. In: Addiction. 2015 ; Vol. 110, No. 3. pp. 441-450.
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abstract = "Aims: U.S. studies contribute heavily to the literature about the tax elasticity of demand for alcohol, and most U.S. studies have relied upon specific excise (volume-based) taxes for beer as a proxy for alcohol taxes. The purpose of this paper was to compare this conventional alcohol tax measure with more comprehensive tax measures (incorporating multiple tax and beverage types) in analyses of the relationship between alcohol taxes and adult binge drinking prevalence in U.S. states. Design: Data on U.S. state excise, ad valorem and sales taxes from 2001 to 2010 were obtained from the Alcohol Policy Information System and other sources. For 510 state-year strata, we developed a series of weighted tax-per-drink measures that incorporated various combinations of tax and beverage types, and related these measures to state-level adult binge drinking prevalence data from the Behavioral Risk Factor Surveillance System surveys. Findings: In analyses pooled across all years, models using the combined tax measure explained approximately 20{\%} of state binge drinking prevalence, and documented more negative tax elasticity (-0.09, P=0.02 versus -0.005, P=0.63) and price elasticity (-1.40, P<0.01 versus -0.76, P=0.15) compared with models using only the volume-based tax. In analyses stratified by year, the R-squares for models using the beer combined tax measure were stable across the study period (P=0.11), while the R-squares for models rely only on volume-based tax declined (P<0.01). Conclusions: Compared with volume-based tax measures, combined tax measures (i.e. those incorporating volume-based tax and value-based taxes) yield substantial improvement in model fit and find more negative tax elasticity and price elasticity predicting adult binge drinking prevalence in U.S. states.",
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