At the Intersection of Health, Health Care and Policy

Cite this article as:

Philip J. Cook and Michael J. Moore
The Economics Of Alcohol Abuse And Alcohol-Control Policies

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Health Affairs 21, no.2 (2002):120-133
doi: 10.1377/hlthaff.21.2.120

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 Drugs, Economics & Policy

The Economics Of
Alcohol Abuse And

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Alcohol-Control Policies
Price levels, including excise taxes, are effective at controlling
alcohol consumption. Raising excise taxes would be in the public
interest.
by Philip J. Cook and Michael J. Moore
ABSTRACT: Economic research has contributed to the evaluation of alcohol
policy through empirical analysis of the effects of alcohol-control measures on
alcohol consumption and its consequences. It has also provided an accounting
framework for defining and comparing costs and benefits of alcohol consump-
tion and related policy interventions, including excise taxes. The most important
finding from the economics literature is that consumers tend to drink less
ethanol, and have fewer alcohol-related problems, when alcoholic beverage
120 ECONOMICS
prices are increased or alcohol availability is restricted. That set of findings is
OF ALCOHOL
relevant for policy purposes because alcohol abuse imposes large external
costs on others. Important challenges remain, including developing a better
understanding of the effects of drinking on labor-market productivity.

T
he pro duct ion and sale o f alcoholic beverages
account for a small share of national product in the United
States and in other advanced economies. However, the delete-
rious effects of alcohol consumption on health and safety constitute
a substantial economic burden, reducing our overall standard of
living. Chronic heavy drinking causes organ damage that results in
disability and early death. Other possible consequences include cog-
nitive impairment, addiction, reduced productivity, neglect of fam-
ily responsibilities, and birth defects. The acute effects of alcohol
abuse are still more costly: traumatic injury and property damage
from accidents, criminal victimization, domestic violence, un-
wanted sexual encounters and venereal diseases, and hangover. In
sum, alcohol is not just another commodity. Around the world,
historically and currently, public concern about the consequences of
excess alcohol consumption for individual health and community

Philip Cook is ITT/Sanford Professor of Public Policy Studies, Terry Sanford Institute of
Public Policy, Duke University, in Durham, North Carolina. Michael Moore is professor of
business administration, Darden School of Business, University of Virginia, in Charlottesville.

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2002 Project HOPEThe People-to-People Health Foundation, Inc.
E C O N O M I C S O F A L C O H O L

well-being has been incorporated in cultural norms, which are often

reinforced by private rules and government regulation.
The nature and extent of government involvement in the alcohol
market has varied widely over time and place, reaching a logical
extreme in the United States with Prohibition in the 1920s. Every
state now has a wide array of alcohol-control measures in place,

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including a minimum age of purchase (twenty-one), excise taxes, a
licensing system for retail outlets, and penalties for driving under
alcohols influence. While alcohol control is not so contentious as
when the temperance movement was in full flower, the relevant
policies continue to be debated and are subject to change.
To some extent, the debate over appropriate policy is concerned
with factual issues. That is the arena in which economists have
made their primary contribution. Economic research on the effects
of alcohol-control measures on consumption and its consequences
has helped to establish that such measures can be effective in reduc-
ing alcohol abuse and improving public health. But the debate is also
concerned with valuesof how best to balance the conflicts be-
tween individual liberty and community well-being. Economists
have contributed to this discussion through application of cost-
benefit analysis to the evaluation of alcohol-control measures and DRUGS, 121
treatment. Economists normative framework is distinguished in ECONOMICS
part by its incorporation of the consumer-sovereignty principle, ac- & POLICY
knowledging the pleasures of drinking as well as the pains.
This paper provides a brief summary of the economics literature
on drinking and its consequences, with a focus on the effects of
alcohol-control measures. We conclude by suggesting that higher tax
rates on alcoholic beverages would be in the public interest and noting
the importance of further research on drinking and productivity.
Consumption Patterns
Beer, wine, and spirits all contain ethyl alcohol (ethanol) in differing
concentrations. A standard drink consists of 12 ounces of beer, 5
ounces of wine, or 1.5 ounces of spirits, each of which has about the
same amount of ethanol (approximately 0.6 ounces).
Apparent consumption of ethanol per capita (age fourteen and
over) peaked in 1980 and 1981, after two decades of steady growth, at
2.76 gallons per yearalmost two drinks per day. Average consump-
tion has declined since then by more than 20 percent. In 1997 the
ethanol consumption of 2.18 gallons per capita was 57 percent from
beer, 14 percent from wine, and 29 percent from spirits.1
Such statistics are computed from state excise-tax records and
industry reports and are subject to certain errors. (Excise taxes are
imposed by the federal and state governments on wholesalers and

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 Drugs, Economics & Policy

are typically quoted on the basis of a fixed charge per gallon rather
than as a percentage of value.) The records omit home production
and take no account of wastage; also, the conversion from beverage
volume to ethanol volume (based on estimates of industry averages)
may be somewhat imprecise. But under the current regulatory re-

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gime, in which the excise tax, adjusted for inflation, is far less than
in the 1950s and the incentive for illicit production correspondingly
slight, the official statistics are probably quite accurate.
In any event, statistics on average consumption conceal the wide
variation among individuals. The National Household Survey on
Drug Abuse for 1996 estimated that 65 percent of adults had at least
one drink during the previous twelve months, while 50 percent
drank during the previous month. The prevalence of self-reported
drinking decreases in middle age and is much lower for women than
for men. For both men and women the self-reported prevalence of
drinking increases with education and family income and is lower
for blacks than for whites.
Among those who drink, there are wide differences in quantity
consumed. As a result, the purchase and consumption of alcohol are
highly concentrated. In particular, those in the top decile (ten per-
122 ECONOMICS centage points) of the drinking distribution consume more than half
OF ALCOHOL of all ethanol. Since alcohol problems are also highly concentrated
among this group, it seems reasonable to target alcohol-control
measures at them. But according to one school of thought (some-
times known as the Single Distribution Theory), informed by a
good deal of evidence from different times and places, drinking prac-
tices are closely linked within a population.2 Hence, reducing the
amount that the heaviest drinkers consume may require a shift
downward of the entire distribution of drinking, and the aim of
alcohol-control policies must ultimately be to reduce average con-
sumption.3 This belief strengthens the rationale for including gen-
eral restrictions on alcohol availability, such as excise taxes, in the
portfolio of policies directed at reducing the costs of alcohol abuse.
But the Single Distribution Theory is not necessary for establishing
the importance of taxes and other alcohol-control measures as pub-
lic health measures; the direct evidence on this matter is extensive
and persuasive.
Demand For Alcoholic Beverages
One thing that economists agree on is that if the price of a commod-
ity is increased, the quantity purchased and consumed will decrease,
other things being equal. But it is tempting to believe that alcoholic
beveragesand especially the active ingredient, ethanolmay be
an exception to this rule. For one thing, consumption of alcohol is

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limited in a variety of ways, not just price. Legal restrictions, cultural

norms, and rules imposed by employers and other private organiza-
tions on where and when alcohol can be consumed are all relevant.
Another limiting factor is widespread distaste for alcohol and the
consequences of consumption. Price may be a secondary concern in

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this mix. Furthermore, alcohol represents a rather small part of the
typical household budget, amounting to 2 percent of personal con-
sumption expenditures, and employers pick up the tab for about 20
percent of alcohol sales. 4
The most compelling argument that alcohol is different when it
comes to the price effect may be that drinking is habit forming.
Conventional wisdom (but not, it should be noted, economic the-
ory) suggests that price will not matter much to those who have
become addicted.5 In response to a general price increase for alco-
holic beverages, alcoholics without much income could preserve
their habit by seeking cheaper sources of ethanol: drinking off-
premises rather than in bars, or buying fortified wine instead of
table wine. However, and despite these plausible speculations, the
evidence is clear that alcoholic beverages do obey the economists
dictum after all: An increase in price results in reduced consump-
tion, not only of the volume of beverage but also of ethanol. DRUGS, 123
Econometric studies of the aggregate demand for alcoholic bever- ECONOMICS
& POLICY
ages have been conducted with a wide variety of data sets. The
consistent result, for both the United States and other countries, is
that sales of beer, wine, and spirits are responsive to price, after
accounting for other factors. Economists often report the degree of
responsiveness in terms of the price elasticity of demand, defined as
the percentage change in quantity associated with a 1 percent in-
crease in price. By that measure, beer tends to be the least responsive
and spirits the most responsive, for reasons that are not well under-
stood.6 But price matters for each type of beverage.
More interesting than the effect of price changes on aggregate
demand is the effect on drinking patterns that may impinge on
health and safety. We would like to know how economic factors
affect the prevalence of abstention, bingeing, and chronic heavy
drinking. Drinking by particular population groups, such as women
during their child-bearing years and youths, are also of special inter-
est. This sort of detailed empirical analysis cannot be performed
with the aggregate data generated by the excise-tax system; rather,
it requires data on individuals. In most cases, such microdata are
taken from surveys in which respondents are asked to report how
much they drink. Needless to say, many people are not entirely
truthful about this matter, or they may be fooling themselves; what-
ever the reason, surveys tend to underestimate total consumption by

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 Drugs, Economics & Policy

4060 percent.7 Thus, analysis of self-reported data must always

proceed with caution, given that observed patterns may reflect sys-
tematic reporting errors as well as the reality of alcohol consumption.
Drinking by youths. Much of the econometric research of
survey data has focused on drinking by youths. Teenagers and young

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adults are of special concern for several reasons. First, youths ex-
hibit relatively high rates (compared with their elders) of binge
drinking and involvement in motor vehicle accidents and violent
crime.8 Second, to the extent that drinking is habit forming, youthful
drinking sets the pattern for later consumption. Third, drinking
behavior during the transition from adolescence to adulthood may
have consequences for human capital and family formation.9
A series of studies have documented the sensitivity of youthful
drinking to both minimum-purchase-age (MPA) laws and to beer
prices.10 (The focus on beer is dictated by the fact that most ethanol
consumed by U.S. youths is in the form of beer.) Some of our recent
research, using the extensive data from the National Longitudinal
Survey of Youth (NLSY), illustrates this type of analysis.11
The NLSY surveyed more than 12,000 youths ages fourteen to
twenty-one in 1979 and has reinterviewed them a number of times
124 ECONOMICS since then. The questionnaires included items on alcohol consump-
OF ALCOHOL tion in the annual surveys of 19821985, and again in 1988 and 1989.
Over the years a wealth of other information has been collected on
parents and siblings, schooling, work, earnings, health status, and
other matters. Alcoholic beverage price information was not ob-
tained from respondents but can be imputed by knowing the re-
spondents state of residence and the survey year.
In our study we used the state beer excise tax as an indicator of
average price, since these taxes are typically passed on to consumers
in the form of retail prices that are higher by at least the amount of
the tax. The other policy variable of interest is the MPA, which we
coded as to whether the youth was of an age to be bound by the
MPA in his or her state. (During the 1980s, unlike in recent years,
states had different MPAs and changed them from time to time.) We
used multivariate regression methods to assess the effects of excise
taxes and MPA on drinking patterns, controlling for a number of
other characteristics that may affect youths drinking decisions:
race, ethnicity, age, aptitude, schooling, socioeconomic status of
parents, family structure, religion during childhood, and so forth.
Our results indicate that both the price of beer (as indicated by the
tax rate) and the MPA affect youths drinking decisions. In particu-
lar, we looked at two measures of drinking: whether the youth had
consumed at least one drink in the previous thirty days, and
whether the youth had been bingeing (consuming six or more

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drinks on a single occasion) each week. Both the tax and MPA had
some effect on the drinking decision, and the MPA had a consider-
able effect on the likelihood of bingeing.
We also found that growing up in a state with lax alcohol-control
measures may increase the chance of later bingeing. Respondents

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who at age fourteen were in a state with a low MPA (eighteen) were
more likely to report bingeing later, other things being equal. A
natural interpretation of this result is that a low MPA provides a
wetter environment for a fourteen-year-old adolescent, which
translates into more drinking at the time and, because of the habit-
forming quality of alcohol, later.
It should be noted that economists who have studied the effect of
alcohol-control measures on youth drinking patterns, using diverse
data sources and statistical methods, have not all reached the same
conclusion. But with only a few exceptions, published studies find
that even small variations in prices matter somewhat.12 Also, there is
consensus that the MPA is effective in controlling alcohol consump-
tion and abuse by those young enough to be affected. Of course, such
alcohol-control measures are not all that matters in youthful deci-
sions, but the tax and MPA are of special interest because they,
unlike, for example, gender, age, and genetic predisposition, are DRUGS, 125
under legislative control. ECONOMICS
& POLICY
A more general finding concerning youthful drinking is also sali-
ent.13 The prevalence of drinking and bingeing among high school
students has declined considerably since the high levels circa 1980.
This decline cannot be explained by changes in alcohol-control
measures and is actually something of a mystery. But whatever its
cause, the trend among teenagers is closely linked to the trend in
adult drinkingjust as predicted by the Single Distribution Theory.
Heavy drinking. Some people acquire such a strong appetite
for alcohol that they are willing to sacrifice their health and much
else for the sake of continued heavy drinking. Symptoms of strong
commitment to alcohol are the basis for a diagnosis of alcohol de-
pendence, a form of mental illness more commonly known as alco-
holism. Often, alcoholics are described as suffering a loss of control
over their drinking. Yet the evidence suggests that this description
is not entirely accurate and that chronic heavy drinkers do respond
to economic incentives.14
An early experiment compared drinking patterns of fourteen
male alcoholics as a function of the cost of a drink.15 Subjects who
were required to work twice as hard for their alcohol drank half as
much as comparable subjects in a similar situation. Other experi-
ments with inpatient alcoholics found that their drinking could be
reduced by contingent loss of privileges and increased financial in-

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centives for abstinence.16 Similar results emerged from an experi-

ment with noninstitutionalized heavy drinkers.17
Economists have contributed to this discussion by analyzing
nonexperimental data on populations. A traditional indicator of the
prevalence of chronic heavy drinking in a population is the mortality
rate from liver cirrhosis. 18 Although cirrhosis has a variety of causes,

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drinking accounts for a majority of cirrhosis deaths in population
groups where drinking is common. There is considerable evidence
that cirrhosis death rates are sensitive to alcohol availability, which
suggests that the group at risk for alcohol-related cirrhosis, long-
term heavy drinkers, is at least somewhat sensitive to price. Notable
examples have been associated with alcohol prohibition and with
the economic disruptions during the First and Second World
Wars.19 (For example, the cirrhosis mortality rate dropped to half of
its 1914 level by 1920 because of state and wartime prohibition and
remained at the new low level throughout the Prohibition period.)20
Several studies have documented that increases in state liquor
taxes also have reduced the cirrhosis mortality rate.21 Part of the
effect is immediate, as those with cirrhotic livers reduce their con-
sumption and hence postpone death. The full effect is only realized
126 ECONOMICS over many years, as higher alcohol prices reduce recruitment of new
OF ALCOHOL heavy drinkers.
Controlling Intoxication And Its Consequences
The U.S. Centers for Disease Control and Prevention (CDC) esti-
mated alcohol-related mortality as 105,000 in 1987, 4.9 percent of
all deaths in that year.22 Nearly half (46 percent) of the deaths were
related to intoxication, including accidents and intentional vio-
lence. By another conventional public health measure, years of life
lost before age sixty-five, such violent deaths constitute fully 80
percent of the alcohol problem in the United States.23 Organ damage
from chronic excess drinking has a relatively small effect on life
expectancy.
Highway safety. Highway safety has been the greatest public
concern in connection with alcohol abuse. Economists have ana-
lyzed the effects of alcohol-control measures on the incidence of
drunk driving (measured by use of survey data) and highway fatality
rates (from official statistics).24 As in the case of the demand studies,
there is near consensus that the MPA matters, reducing the highway
fatality rate for the affected age groups by about 7 percent.25 The
evidence is more mixed on the effects of price, although most studies
offer support for the view that even small price increases (associated
with state excise-tax increases) cause some reduction in alcohol-
related fatal accidents.26

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Alcohol advertising. Advertising also may play some role in

promoting alcohol abuse and highway fatalities. Henry Saffer ana-
lyzed the relationship between fatality rates and alcohol advertising
in the top seventy-five media markets.27 After accounting for re-
gional price differences and population variables such as income and

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religion, he found that alcohol advertising was significantly related
to total and nighttime vehicle fatalities, to the extent that a total ban
on alcohol advertising might be expected to save several thousand
lives per year.
Impact of fines and liability laws. Much of the drinking that
leads to drunk driving occurs on-premises, at bars, clubs, and res-
taurants. States have acted in various ways to reduce this deadly
linkage, for instance by using the threat of fines or even license
revocation to discourage service to minors and intoxicated persons.
A number of states have dram shop liability for commercial serv-
ers, holding them potentially liable for the damage done by patrons
after drinking too much at these establishments. There is some evi-
dence that the imposition of liability is effective at reducing high-
way fatalities.28 A recent study found that the behavior of servers in
monitoring the drinking of adult patrons is influenced by the man-
agements perception of the likelihood of being sued.29 DRUGS, 127
Linkage with violence and risky sex. Alcohol abuse is also ECONOMICS
& POLICY
linked to violence. Under the influence of alcohol, a parent may be
provoked to strike an irritating child; a college student may force-
fully insist on having sex with his date; friends may escalate an
argument into a bloody fight; a robbery victim may foolishly attempt
resistance in the face of a loaded gun; soccer fans may riot in re-
sponse to an unsatisfactory outcome. Some people are more prone to
violence, or to provoking violence, when drinking than when so-
ber.30 Only a few studies have attempted to link violence to alcohol-
control measures, and these offer evidence that raising excise taxes
on alcoholic beverages would reduce criminal and family violence.31
Risky and unwanted sex is yet another consequence associated
with alcohol abuse, and the epidemiological evidence suggests that
as a result alcohol abuse promotes the spread of venereal disease. A
recent econometric analysis of gonorrhea rates among youths dem-
onstrated that this is yet another outcome that can be curtailed
through more stringent alcohol-control measures.32
Drinking And Productivity
The belief that drinking impairs productivity has helped to motivate
a wide range of both private and public responses, from workplace
rules banning drinking on the job to alcohol regulations governing
the armed forces. Historically, this concern with the quality and

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quantity of work was a major factor in nineteenth-century temper-

ance movements in the United States and Europe.33 In recent times
the belief that alcohol abuse reduces the productivity of some em-
ployees has persuaded the majority of large U.S. corporations to
establish occupational alcoholism programs or employee assistance
programs.34 And several government-commissioned estimates of the

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economic costs of alcohol abuse have asserted that these costs are
predominantly the result of reduced productivity.35 Curiously, how-
ever, the belief that drinking impairs productivity does not receive
unambiguous support from the econometric work on the subject.
Based on fairly extensive research by a number of economists, it
appears that the estimated relationship between self-reported
drinking and measures of the quality and quantity of labor supply
(hours worked, earnings, absenteeism) is not what we might ex-
pect. In fact, self-reported abstainers earn less on average than
drinkers, even when a wide range of other productivity-related
characteristics are taken into account by use of multivariate statisti-
cal methods. This finding is reminiscent of the well-established
finding in the medical literature that drinking reduces the likelihood
of coronary heart disease, and moderate drinking in middle age ex-
128 ECONOMICS tends life expectancy overall.36 The difference between the absten-
OF ALCOHOL tion penalty in heart disease and productivity is that the medical
effect appears much more plausible, as there exist physiological
mechanisms by which regular drinking could improve cardiovascu-
lar health. But no economist has documented a plausible mechanism
that could account for how drinking could improve productivity,
especially among youths (for whom the effect on heart disease is
irrelevant). This puzzle has not yet been resolved.
The evidence on whether heavy drinkers tend to fare more poorly
in the labor market than light drinkers do is mixed, with some
studies reporting the existence of a penalty for heavy drinking and
others finding no such penalty. And while men of prime working age
who exhibit symptoms of alcohol dependence or abuse earn less
than those who do not exhibit such symptoms, their female counter-
parts appear to earn more.37
In any event, it seems safe to say that the direct effect of drinking
on productivity in the U.S. context is small.38 There is persuasive
evidence, however, that heavy drinking has an indirect effect on
productivity by interfering with schooling and family formation,
both of which affect subsequent productivity and earnings.39
Evaluation Of Alcohol-Control Measures
Alcohol-control measures are effective only to the extent that they
affect consumers decisions about drinking. By restricting alcohol

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availability, they impinge on the enjoyment consumers derive from

alcohol. In judging how high to set excise taxes or the MPA law, or
how much to restrict on-premises service or alcohol advertising, it is
necessary to weigh the loss of enjoyment against the possible gains
in health, safety, public order, and so forth. A direct comparison of

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these apparently incommensurable consequences is not easy, but
economics provides a well-developed framework for doing just that.
Excise taxes. Much of the research in this area has focused on
the question of alcohol excise taxation. How high should these taxes
be set? One standard is that the tax revenues should be adequate to
pay the external costs of alcohol consumption, that is, the costs
that are not borne by the drinker.40 By that standard, it is not appro-
priate for the tax rate to take into account that drinkers are at
heightened risk of injury, since they already pay that cost and
presumably take it into account in making their consumption deci-
sions. On the other hand, to the extent that drinkers place others at
greater risk of injury (an external cost), that should be reflected in
the tax rate, for at least two reasons. First, it is only fair that drinkers
should compensate the public for the external costs of their choices.
Second, if alcohol prices do not reflect the full social costs of con-
sumption (including the external costs), then consumers will drink DRUGS, 129
too much, in the technical sense that at the margin their drinks will ECONOMICS
& POLICY
be worth less to them than they cost.
A much-cited study of the costs of heavy drinking followed the
economists normative framework, distinguishing between inter-
nal costs (those that are borne by the drinker and presumably taken
into account in the drinking decision) and external costs (inflicted
by drinkers on bystanders).41 If we accept the principle of consumer
sovereignty, then it is the external costs that are relevant for policy
purposes. On the basis of data from the mid-1980s, Willard
Manning and his colleagues found that the external cost per ounce
of ethanol consumed was about forty-eight cents, double the aver-
age state and federal tax per ounce that was then in place.42 Much of
the external costs of alcohol consumption are borne by victims of
intoxicated drivers. (By way of contrast, most smoking-related
costs, including morbidity and early death, are borne by the smokers
themselves and hence do not support higher excise taxes.) The obvi-
ous conclusion is that alcohol taxes are too low. A subsequent study
amplified this conclusion by noting that Manning and colleagues
had failed to account for nonfatal highway injuries.43 Including inju-
ries increased the estimate of external costs to sixty-three cents per
ounce. A still higher estimate would follow from changing the origi-
nal assumption that intrafamily effects of alcohol abuse should be
ignored in setting the tax rate. These effects are internal to the

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extent that family members are tied together by sentiment and

shared responsibilities. Nonetheless, family members have individ-
ual interests that are sometimes in conflict; in particular, there is a
clear public stake in preventing alcohol-induced child abuse and
neglect and fetal damage. Some economists have gone further and

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argued that for a variety of reasons, individuals may tend to take
inadequate account of their future interests when making decisions
about the consumption of habit-forming commodities, which pro-
vides yet another rationale for government intervention.44
Concluding Thoughts
Arguably, the most important contribution of economists has been
the repeated demonstration that alcohol is no exception to the eco-
nomic law of downward-sloping demand. The price level of alco-
holic beverages influences per capita consumption levels of ethanol,
as well as the incidence of alcohol abuse and its health-related con-
sequences. Hence, excise taxes on alcoholic beverages are effective
alcohol-control measures that can be used to promote public health.
The minimum purchase age is also effective at reducing abuse. Other
measures, including restrictions on alcohol advertising and dram-
130 ECONOMICS shop liability, appear promising.
OF ALCOHOL Just because an alcohol-control measure is effective at reducing
abuse does not by itself justify its implementation. The costs as well
as the benefits of government interventions deserve attention. Eco-
nomics offers a normative framework for evaluating the trade-offs
involved, one that honors consumers preferences and acknowledges
that alcohol is a source of legitimate enjoyment but that people will
tend to drink too much unless they are forced to take account of the
full costs associated with consumption.
Based on that perspective and the empirical work cited above, a
clear conclusion emerges: Current excise-tax rates are too low, both
nationally and in every state. The rates are far less than the average
social cost of each drink consumed. Raising the excise tax would be
in the public interest, despite the fact that it lacks precision. One
could envision a more nuanced policy that adjusted tax rates to risk
levels based on beverage type and location of sale; for example,
on-premises sales could be subject to higher tax rates because they
are more closely linked to traffic injuries than package sales are.
Furthermore, successful policies to separate drinking from driving
and to reduce abusive drinking directly would correspondingly re-
duce the ideal tax rate.
In our view, a reasonable agenda for economics research on drink-
ing, abuse, and its consequences would continue to focus on the
evaluation of alcohol-control measures, in the hope of establishing a

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E C O N O M I C S O F A L C O H O L

stronger consensus on the effects of excise taxes, liability rules, and

advertising restrictions. Also important is further economic re-
search evaluating treatment for dependence and abuse (a topic not
discussed here). Perhaps the most compelling agenda item, how-
ever, is settling the mystery of how drinking affects earnings and

Downloaded from http://content.healthaffairs.org/ by Health Affairs on January 16, 2017 by HW Team

productivity.

An earlier version of this paper was presented 4 October 2001 at the conference,
Non-Medical Determinants of Health Status, sponsored by Princeton Univer-
sitys Center for Health and Wellbeing.

NOTES
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