Skip to main page content
Access keys NCBI Homepage MyNCBI Homepage Main Content Main Navigation
. 2016 Feb 23;13(2):e1001963.
doi: 10.1371/journal.pmed.1001963. eCollection 2016 Feb.

Estimated Effects of Different Alcohol Taxation and Price Policies on Health Inequalities: A Mathematical Modelling Study

Affiliations
Free PMC article

Estimated Effects of Different Alcohol Taxation and Price Policies on Health Inequalities: A Mathematical Modelling Study

Petra S Meier et al. PLoS Med. .
Free PMC article

Abstract

Introduction: While evidence that alcohol pricing policies reduce alcohol-related health harm is robust, and alcohol taxation increases are a WHO "best buy" intervention, there is a lack of research comparing the scale and distribution across society of health impacts arising from alternative tax and price policy options. The aim of this study is to test whether four common alcohol taxation and pricing strategies differ in their impact on health inequalities.

Methods and findings: An econometric epidemiological model was built with England 2014/2015 as the setting. Four pricing strategies implemented on top of the current tax were equalised to give the same 4.3% population-wide reduction in total alcohol-related mortality: current tax increase, a 13.4% all-product duty increase under the current UK system; a value-based tax, a 4.0% ad valorem tax based on product price; a strength-based tax, a volumetric tax of £0.22 per UK alcohol unit (= 8 g of ethanol); and minimum unit pricing, a minimum price threshold of £0.50 per unit, below which alcohol cannot be sold. Model inputs were calculated by combining data from representative household surveys on alcohol purchasing and consumption, administrative and healthcare data on 43 alcohol-attributable diseases, and published price elasticities and relative risk functions. Outcomes were annual per capita consumption, consumer spending, and alcohol-related deaths. Uncertainty was assessed via partial probabilistic sensitivity analysis (PSA) and scenario analysis. The pricing strategies differ as to how effects are distributed across the population, and, from a public health perspective, heavy drinkers in routine/manual occupations are a key group as they are at greatest risk of health harm from their drinking. Strength-based taxation and minimum unit pricing would have greater effects on mortality among drinkers in routine/manual occupations (particularly for heavy drinkers, where the estimated policy effects on mortality rates are as follows: current tax increase, -3.2%; value-based tax, -2.9%; strength-based tax, -6.1%; minimum unit pricing, -7.8%) and lesser impacts among drinkers in professional/managerial occupations (for heavy drinkers: current tax increase, -1.3%; value-based tax, -1.4%; strength-based tax, +0.2%; minimum unit pricing, +0.8%). Results from the PSA give slightly greater mean effects for both the routine/manual (current tax increase, -3.6% [95% uncertainty interval (UI) -6.1%, -0.6%]; value-based tax, -3.3% [UI -5.1%, -1.7%]; strength-based tax, -7.5% [UI -13.7%, -3.9%]; minimum unit pricing, -10.3% [UI -10.3%, -7.0%]) and professional/managerial occupation groups (current tax increase, -1.8% [UI -4.7%, +1.6%]; value-based tax, -1.9% [UI -3.6%, +0.4%]; strength-based tax, -0.8% [UI -6.9%, +4.0%]; minimum unit pricing, -0.7% [UI -5.6%, +3.6%]). Impacts of price changes on moderate drinkers were small regardless of income or socioeconomic group. Analysis of uncertainty shows that the relative effectiveness of the four policies is fairly stable, although uncertainty in the absolute scale of effects exists. Volumetric taxation and minimum unit pricing consistently outperform increasing the current tax or adding an ad valorem tax in terms of reducing mortality among the heaviest drinkers and reducing alcohol-related health inequalities (e.g., in the routine/manual occupation group, volumetric taxation reduces deaths more than increasing the current tax in 26 out of 30 probabilistic runs, minimum unit pricing reduces deaths more than volumetric tax in 21 out of 30 runs, and minimum unit pricing reduces deaths more than increasing the current tax in 30 out of 30 runs). Study limitations include reducing model complexity by not considering a largely ineffective ban on below-tax alcohol sales, special duty rates covering only small shares of the market, and the impact of tax fraud or retailer non-compliance with minimum unit prices.

Conclusions: Our model estimates that, compared to tax increases under the current system or introducing taxation based on product value, alcohol-content-based taxation or minimum unit pricing would lead to larger reductions in health inequalities across income groups. We also estimate that alcohol-content-based taxation and minimum unit pricing would have the largest impact on harmful drinking, with minimal effects on those drinking in moderation.

Conflict of interest statement

The authors have declared that no competing interests exist. The original data creators, depositors, copyright holders, or funders of the data collection, and the UK Data Archive, bear no responsibility for analyses or interpretation of the data described in this report. The UK Living Costs and Food Survey and Health Survey for England are Crown Copyright material.

Figures

Fig 1
Fig 1. Distribution of alcohol purchasing by income.
This figure shows the average number of units purchased per moderate drinker per year for alcohol across price bands, stratified by income. Moderate drinkers (a) purchase little alcohol overall and show a preference for middle and higher price bands, even when having lower incomes. Increasing risk drinkers (b) purchase alcohol across all price bands, but there is a clear gradient whereby poorer drinkers purchase more of the cheapest alcohol. Heavy drinkers (c)—across income quintiles, but especially poorer heavy drinkers—show a very clear preference for cheaper alcohol. Price bands are deciles of the price distribution of all alcohol sold in England. Income groups are defined by equivalised income quintiles.
Fig 2
Fig 2. Equity gap in the alcohol-related death rates between those in routine/manual and professional/managerial occupations: total drinker population.
This figure shows the effect of alcohol pricing policies on the gap between alcohol-related death rates for drinkers in the highest and lowest socioeconomic occupation groups. All policies reduce this gap, but volumetric tax and minimum unit pricing (“Minimum Price”) have larger effects on the gap than ad valorem tax (“Sales Tax”) or increasing the UK’s current tax (“Current Tax”).
Fig 3
Fig 3. Equity gap in the alcohol-related death rates between those in routine/manual and professional/managerial occupations: heavy drinkers.
This figure shows the effect of alcohol pricing policies on the gap between alcohol-related death rates for heavy drinkers in the highest and lowest socioeconomic occupation groups. All policies reduce this gap, but volumetric tax and minimum unit pricing (“Minimum Price”) have larger effects on the gap than ad valorem tax (“Sales Tax”) or increasing the UK’s current tax (“Current Tax”).
Fig 4
Fig 4. Probabilistic sensitivity analysis results for policy impacts on consumption by drinking level group.
This figure shows the uncertainty in estimated policy impacts on alcohol consumption by drinking level group generated from 30 PSA runs. Whiskers represent maximum and minimum values. Boxes represent interquartile ranges. Mid-box lines represent medians. Red lines represent the baseline (deterministic) results. AV, ad valorem tax; CT, current tax increase; MUP, minimum unit pricing; VT, volumetric tax.
Fig 5
Fig 5. Probabilistic sensitivity analysis results for policy impacts on deaths by socioeconomic group.
This figure shows the uncertainty in estimated policy impacts on death rates by socioeconomic group generated from 30 PSA runs. Whiskers represent maximum and minimum values. Boxes represent interquartile ranges. Mid-box lines represent medians. Red lines represent the baseline (deterministic) results. AV, ad valorem tax; CT, current tax increase; MUP, minimum unit pricing; VT, volumetric tax.
Fig 6
Fig 6. Probabilistic sensitivity analysis results for policy impacts on health inequalities.
This figure shows PSA results for policy impacts on the equity gap in alcohol-related death rates between the routine/manual and professional/managerial occupation groups. The overall plot represents uncertainty generated from 30 PSA runs. Whiskers represent maximum and minimum values. Boxes represent interquartile ranges. Mid-box lines represent medians. Red lines represent the baseline (deterministic) results. AV, ad valorem tax; CT, current tax increase; MUP, minimum unit pricing; VT, volumetric tax.

Similar articles

See all similar articles

Cited by 23 articles

See all "Cited by" articles

References

    1. Lim S, Vos T, Flaxman A, Danaei G, Shibuya K, Adair-Rohani H, et al. A comparative risk assessment of burden of disease and injury attributable to 67 risk factors and risk factor clusters in 21 regions, 1990–2010: a systematic analysis for the Global Burden of Disease Study 2010. Lancet. 2013;380:2224–2260. - PMC - PubMed
    1. Rehm J, Mathers C, Popova S, Thavorncharoensap M, Teerawattananon Y, Patra J. Global burden of disease and injury and economic cost attributable to alcohol use and alcohol-use disorders. Lancet. 2009;373:2223–2233. 10.1016/S0140-6736(09)60746-7 - DOI - PubMed
    1. Marmot M. Fair society, healthy lives: strategic review of health inequalities in England post-2010. London: The Marmot Review; 2010.
    1. Institute of Medicine. How far have we come in reducing health disparities? Progress since 2000: workshop summary. Washington (District of Columbia): National Academies Press; 2012.
    1. Gallet CA. The demand for alcohol: a meta-analysis of elasticities. Aust J Agric Resour Econ. 2007;51:121–135.

Publication types

Feedback