The Effect of Introducing a Minimum Price on the Distribution of Alcohol Purchase: A Counterfactual Analysis

Abstract

We use counterfactual analysis techniques to evaluate the impact of a $2 minimum unit price (MUP) on the distribution of Australian (Victorian) household off-trade alcohol purchases. Our estimates suggest that a $2 MUP significantly reduces the purchases of at-risk households by up to -0.92 [90% CI: -1.55, -0.28] standard drinks at the highest quantiles and has substantially less effect on households purchasing at light and moderate levels. A $2 MUP may reduce the proportions of male and female shoppers purchasing at the public health threshold of more than two standard drinks per household member per day by -3.03 [90% CI: -4.83, -1.22] percentage points (relative variation: -17%); and -1.85 [90% CI: -2.60, -1.10] percentage points (relative variation:-22%), respectively. Implementing an MUP on alcohol thus promises significant positive impacts on public health. Copyright © 2016 John Wiley & Sons, Ltd.

Evidence for the effectiveness of minimum pricing of alcohol: a systematic review and assessment using the Bradford Hill criteria for causality

“…The Sheffield Alcohol Policy Model is one such model and has been applied in England, 25–29 47 Scotland 45 51 and Canada 48 and provides very strong support for the specificity criterion. Further support is provided by other different modelling studies in the UK 49 50 and Australia 30 31 and a (non-randomised) trial in the USA. 41 Thus, support for the specificity criteria is very strong.…”

Light, Moderate, and Heavy Drinking

“…Countries that currently use minimum unit pricing include Canada, Moldova, Russia, Scotland, Ukraine, Uzbekistan, and some US states (IAS 2019). MUP has been proposed as a way to target the population of heavy drinkers without penalizing light or moderate drinkers (Holmes et al 2014;Sharma et al 2016;Calcott 2019).…”

“…They find that moderate drinkers are barely affected regardless of income, while the heavy drinkers are most responsive to the minimum price adjustment, and the effects here are largest for the lowest-income drinkers. Sharma et al (2016) focus on Australia. Their simulation study evaluates the difference in the observed and counterfactual distributions of purchases based on whether or not a $2 MUP on alcohol is imposed.…”

Light and heavy drinking in jurisdictions with different alcohol policy environments

“…First, the outlined hypothesis is longitudinal in nature and, hence, requires a longitudinal study to test it. Second, evidence regarding heavy drinkers' responsiveness to tax and price changes is inconclusive (Aepli, 2014;Byrnes, Shakeshaft, Petrie, & Doran, 2016;Elder et al, 2010;Sharma, Etile, & Sinha, 2016;Xuan, Chaloupka, et al, 2015). In addition, the differential impact of policy and availability changes, as a function of baseline drinking, is not well studied beyond price and tax studies.…”