Alcohol and economics. Research, politics or industry?

Abstract

The article reviews the history of the discussion concerning the effect of alcohol consumption on the national economy. The point of departure is a discussion prompted by the prohibitionists in the Nordic countries and US who succeeded in bringing a ban on alcohol into reality. It made sense in those circumstances to ask the question. Two different situations were compared, a society where alcohol was forbidden and one where it was not. After the prohibitionists' hope of an alcohol-free society became a lost cause in the 1930s, interest in these calculations waned for a spell. Interest was re-ignited in Finland, Norway and Sweden in the 1960s and '70s, however, spreading to North America and Australia in the 1980s and '90s. A set of international guidelines was issued on how to estimate the social costs attributable to alcohol consumption. In practice, there was a heavy bias in favour of costs, while the income side, with the exception of alcohol's presumed beneficial effect on cardiovascular diseases, was left out. Cost-of-illness studies were employed here, in which a contemporary society was compared with a fictive one, where alcohol had never existed. This article argues that such studies are not very meaningful in a research context and represent a capitulation to the desire of politicians to give political decisions a semblance of neutrality based on a common-sense approach to economics.