...February 16, 2000 ALCOHOL Philip J. Cook and Michael J. Moore Duke University and NBER Prepared for the Handbook of Health Economics, Joseph P. Newhouse and Anthony Culyer, editors. Thanks to Michael Grossman, Will Manning, and Harri Sintonen for their very helpful comments. All errors remain the authors’. Abstract Excess drinking is associated with lost productivity, accidents, disability, early death, crime, neglect of family responsibilities, and personality deterioration. These and related concerns have justified special restrictions on alcoholic-beverage commerce and consumption. The nature and extent of government involvement in this arena vary widely over time and place, and are often controversial. Economists have contributed to the evaluation of alcohol policy through empirical work on the effects of alcohol-control measures on consumption and its consequences. Economics has also provided an accounting framework for defining and comparing costs and benefits of interventions, including excise taxes. Outside of the policy arena, economists have analyzed alcohol consumption in the context of stretching the standard model of consumer choice to include intertemporal effects and social influence. Nonetheless, perhaps the most important contribution by economists has been the repeated demonstration that there is nothing unusual about alcohol in at least one essential respect: consumers drink less ethanol (and have fewer alcohol-related problems) when alcohol-beverage...
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