Once again, the brown trout that wont flush away has bobbed up for air. Yesterday, David Cameron put alcohol minimum pricing back on the agenda. Across the land, responsible doctors cried Cheers! The Chair of the Royal College of General Practitioners, Dr Clare Gerada, who counts addiction – in others, one hastens to add – among her special interests, spoke for many when she tweeted the price, availability and advertising is all mantra. This mantra is underpinned by left shift, which sounds cool, being the sort of thing cool astronomers like Brian ‘Wow, Magnificent’ Cox might say, but it suffers from a defect WM would never allow: it is chasing the wrong hair, or rather tail, of the dog. In practice, minimum pricing will be spectacularly ineffective at reducing high alcohol use, and even worse, it will almost certainly result in blowback, by which Dr No refers not to the visit to the loo on the morning after the night before, but unintended harm arising from well-intentioned practice.
The minimum pricing will work mantra rests on two related ideas. The first, which has curiously become doctrine, even dogma, despite being more hypothesis than theory, is the left shift notion. This is the idea, and idea it is, because it has proved remarkably difficult to demonstrate robustly in practice, that the behavioural body wags the behavioural tail; that is, if we reduce average consumption, then so too will we similarly reduce consumption in heavy consumers, the ‘left shift’ being the resulting move to the left of the bell shaped curve when we plot the distribution on a graph.
The second factor we need to consider is what Wingnut and Meccano when speaking with the tongues of economists call price elasticity of demand. This deceptively complex sounding term is in fact nothing more than a consideration and measure of how price affects consumption. If the price of petrol goes up, do we choose to drive less (and either cancel our journey, or perhaps go by train instead), or do we still drive as much as we did before, because driving is the only way we can get to work? The more we change our behaviour in response to price changes, the more price elastic our behaviour is.
We can even measure, and put numbers on, price elasticity, and economists, being economists, do just that. We can divide a corresponding percentage change in consumption by the percentage change in price that accompanies it, and produce an index. If a 10% increase in price is accompanied by a 10% decrease in consumption, we get an index of one, or unit elasticity. Indexes between zero and one are said to indicate price inelasticity (behaviour changes by less than price); indexes over one indicate price elasticity. In the special case where consumption remains unchanged, whatever the price, we get an index of zero, or perfect inelasticity. Because the change in consumption is almost invariably negative (a decrease), the elasticity is negative (-10% consumption/+10% price), and the index is properly expressed as a negative number (-1).
Now, for left shift thinking to work, alcohol consumption needs not only to be reasonably elastic (or at the very least – sorry – ‘relatively un-inelastic’), it also needs to be so across the board, for all drinkers, whatever their tipple, and whatever their habitual consumption. The closer price elasticity gets to zero, the more ineffective left shift thinking will become; the bigger the number, the more effective it will be. So what do we know about price elasticity for alcohol?
Unsurprisingly, given the economic and health importance of alcohol, many studies have been done, enough to allow meta-analysis, and it is perhaps fair to say the meta-analysis (‘1003 estimates from 112 studies’) is this 2009 paper. The overall figure it gives for total alcohol price elasticity is around –0.5, that is to say, alcohol is rather inelastic (despite the upbeat tone of the authors). And it gets worse for the left shift lovers. Price elasticity for beer, the binge-drinking lager-lout’s tipple, is less, at –0.46 (although higher for wine and spirits, at –0.69 and –0.80), while that for heavy drinkers is considerably lower, at –0.28.
What this means is that a 10% hike in alcohol price will be associated with a 2.8% fall in heavy drinkers’ consumption. To get a meaningful drop in consumption – say 28%, to keeps the sums easy, and even that only reduces 60 units a week to around 43 units – we would need to increase price by a whopping 100% across the board. Now, just somehow, Dr No doesn’t see that happening…and any left shift that might occur if minimum pricing were introduced would leave heavy drinkers relatively untouched. The curve would not so much left shift as left stretch, and that just doesn’t sound as cool.
And the blowback? Well, for heavy drinkers with an elasticity of –0.28%, every 10% hike in cost will only consumption back by 2.8%, so overall, net expenditure will increase. And for anyone on a fixed average or low income, that can only mean one thing: less to spend on food, less to spend on kids, less to spend on things that matter. And where will that extra spending on booze go? Why – if the increase is achieved by minimum pricing – it will go straight into the pockets of the supermarkets and drinks manufacturers. GPs, even chair GPs, should be careful what they tweet for.
Statistical (a) and lexicological (b) footnote: (a) readers who follow the links to the stats will find frequent references to the results being highly significant. Note this is statistical significance only (the obtained result is highly unlikely to differ from the true value); it tells us nothing about real world significance, meaning or usefulness. (b) Dr No suspects some of the confusion about price effects on arise because of confusion between the vaguer concept price sensitivity (alcohol is price sensitive, but how much?) and the more precise price elasticity, which provides a numerical measure of how sensitive (not very much at all – alcohol is relatively price inelastic). The two terms may overlap, but are not interchangeable.