Equity in household spending on alcoholic beverages in South Africa: assessing changes between 1995 and 2011

Globally, alcohol consumption accounts for a substantial burden of disease, which translates into high social and economic costs. To address this burden, several policies (e.g. age and trading hour restrictions, increasing alcohol taxation) were implemented. Despite the existence of these policies evidence shows that alcohol misuse and alcohol-related harms have increased in South Africa over recent years. The objective of this paper is to assess progressivity and the changes in progressivity of alcohol expenditure at the household level in South Africa using datasets that span 15 years.

Data come from the 1995, 2000, 2005/06 and 2010/11 South Africa Income Expenditure Survey. Distribution of spending on alcoholic beverages were analyzed using standard methodologies. Changes in progressivity between 1995 and 2000, and between 2005/06 and 2010/11 were also assessed using the Kakwani index.

Alcohol spending was regressive between 1995 and 2011 as the fraction of poorer households' expenditure spent on alcohol beverage exceeds that for the richest households. Also, the difference in Kakwani indexes of progressivity indicates that spending on alcoholic beverages has become less regressive between the same time periods.

The results show no evidence that alcohol policy including taxation increased regressivity. Thus, there is an opportunity to further reduce the regressivity using coherent alcohol policies. This paper concludes that there is a need for further research to unpack why alcohol spending became less regressive over the years that goes beyond just looking at changes in the distribution of alcohol expenditure.