The economics of alcohol

The use of economic arguments with regard to four aspects of alcohol policy is described and discussed. The first aspect is the impact of a potential reduction in alcohol consumption on employment by alcohol production and trade. It is shown that employment is quite independent of the level of consumption. The second aspect is the opportunity for serving the public health and state finance interests at the same time by developing alcohol taxation. The third aspect is the relationship between the public revenue from alcohol and the public costs for alcohol-related problems. A "polluter pays" principle with regard to alcohol would mean higher taxation of alcoholic beverages. The fourth aspect is the need for cost-effectiveness analyses to support the choices by the decision makers between different alcohol policy options. It is concluded that such analyses could have impact on the priorities in public health policy on alcohol.