Tackling alcohol misuse: purchasing patterns affected by minimum pricing for alcohol

Anne Ludbrook, Dennis Petrie, Lynda McKenzie, Shelley Farrar
Applied Health Economics and Health Policy 2012 January 1, 10 (1): 51-63

BACKGROUND: Alcohol consumption is associated with a range of health and social harms that increase with the level of consumption. Policy makers are interested in effective and cost-effective interventions to reduce alcohol consumption and associated harms. Economic theory and research evidence demonstrate that increasing price is effective at the population level. Price interventions that target heavier consumers of alcohol may be more effective at reducing alcohol-related harms with less impact on moderate consumers. Minimum pricing per unit of alcohol has been proposed on this basis but concerns have been expressed that 'moderate drinkers of modest means' will be unfairly penalized. If those on low incomes are disproportionately affected by a policy that removes very cheap alcohol from the market, the policy could be regressive. The effect on households' budgets will depend on who currently purchases cheaper products and the extent to which the resulting changes in prices will impact on their demand for alcohol. This paper focuses on the first of these points.

OBJECTIVE: This paper aims to identify patterns of purchasing of cheap off-trade alcohol products, focusing on income and the level of all alcohol purchased.

METHOD: Three years (2006-08) of UK household survey data were used. The Expenditure and Food Survey provides comprehensive 2-week data on household expenditure. Regression analyses were used to investigate the relationships between the purchase of cheap off-trade alcohol, household income levels and whether the household level of alcohol purchasing is categorized as moderate, hazardous or harmful, while controlling for other household and non-household characteristics. Predicted probabilities and quantities for cheap alcohol purchasing patterns were generated for all households.

RESULTS: The descriptive statistics and regression analyses indicate that low-income households are not the predominant purchasers of any alcohol or even of cheap alcohol. Of those who do purchase off-trade alcohol, the lowest income households are the most likely to purchase cheap alcohol. However, when combined with the fact that the lowest income households are the least likely to purchase any off-trade alcohol, they have the lowest probability of purchasing cheap off-trade alcohol at the population level. Moderate purchasing households in all income quintiles are the group predicted as least likely to purchase cheap alcohol. The predicted average quantity of low-cost off-trade alcohol reveals similar patterns.

CONCLUSION: The results suggest that heavier household purchasers of alcohol are most likely to be affected by the introduction of a 'minimum price per unit of alcohol' policy. When we focus only on those households that purchase off-trade alcohol, lower income households are the most likely to be affected. However, minimum pricing in the UK is unlikely to be significantly regressive when the effects are considered for the whole population, including those households that do not purchase any off-trade alcohol. Minimum pricing will affect the minority of low-income households that purchase off-trade alcohol and, within this group, those most likely to be affected are households purchasing at a harmful level.

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