The cost of alcohol in California

California is the largest alcohol market in the United States. In 2005 alone, Californians consumed almost 14 billion alcoholic drinks, which contributed to many severe and potentially fatal alcohol-related illnesses and conditions. Alcohol use also causes violent and nonviolent crimes, as well as injuries and traffic collisions. While several studies have estimated the magnitude and cost of these problems nationally and others have analyzed underage drinking costs, no overall cost estimate at the state level currently exists for California. We present the first comprehensive estimate of the cost of alcohol consumption in California.

For each category of alcohol-related problems, we estimated fatal and nonfatal cases attributable to alcohol use. We multiplied alcohol-attributable cases by estimated costs per case to obtain total costs for each problem. Our estimates are presented in 2 sections, the economic costs, estimated using a human capital approach, and quality-of-life costs estimated using a quality adjusted life year framework.

Alcohol consumption in California led to an estimated 9,439 deaths and 921,929 alcohol-related problems, such as crime and injury in 2005. The economic cost of these problems is estimated at between $35.4 billion and $42.2 billion. Our main estimate is $38.5 billion, of which $5.4 billion was for medical and mental health spending, $25.3 billion in work losses, and $7.8 billion in criminal justice spending, property damage and public program costs. In addition, alcohol is responsible for severe reductions in individuals' quality of life in California. We estimate that the disability caused by injury, the personal anguish of violent crime victims, and the life years lost to fatality are the largest costs imposed by alcohol. The total value for this reduced quality of life in California is between $30.3 billion and $60.0 billion. Our main estimate for quality-of-life costs is $48.8 billion.

In light of the associated substantial illness, injuries, death, and high cost to society, alcohol consumption in California needs serious attention. In addition, the methods developed in this paper can be expanded to estimate the cost of alcohol in other states.