The Use of Economic Tools to Develop a Consensus on Alcohol Policies within and between Jurisdictions

Abstract

Alcohol policies encounter major problems because of the lack of consensus within and between jurisdictions. Tools that economists have developed in other contexts may be of use in addressing these problems.

The consensus between neighboring jurisdictions can be facilitated when a jurisdiction with higher alcohol taxes and greater alcohol revenue offers to share part of that revenue with the neighbor with lower alcohol revenue and alcohol taxes. The final solution can result in both jurisdictions having larger revenues and in reduced alcohol consumption.

Decreasing support for alcohol curbing policies within some jurisdictions could probably be reversed if such tools as revenue neutrality of alcohol taxes, heavier taxation of heavy drinkers, introduction of minimum prices and substitution of low-quality drinks with high-quality food and drinks were to be employed, and if greater attention were given to the determinants of alcohol needs and, in particular, of “happiness.”