Hildegard C. Wette, PhD, Research Officer, Alcohol & Public Health Research Unit, Department of Community Health, Medical School, University of Auckland, Private Bag 92019, Auckland, New Zealand.
The effect of prices on alcohol consumption in New Zealand 1983–1991
Article first published online: 29 MAY 2009
1993 Australasian Professional Society on Alcohol and other Drugs
Drug and Alcohol Review
Volume 12, Issue 2, pages 151–158, April 1993
How to Cite
WETTE, H. C., ZHANG, J.-F., BERG, R. J. and CASSWELL, S. (1993), The effect of prices on alcohol consumption in New Zealand 1983–1991. Drug and Alcohol Review, 12: 151–158. doi: 10.1080/09595239300185581
- Issue published online: 29 MAY 2009
- Article first published online: 29 MAY 2009
- Alcohol consumption;
- price elasticity;
- taxation policy
The strength of the effect of prices on alcohol consumption is of relevance in determining the potential impact that alcohol taxes have on consumption and, thereby, alcohol-related problems. This price-consumption relationship was investigated for New Zealand. Multiple regression analysis was employed using quarterly aggregate consumption and price data for 1983–1991. Price elasticities of alcohol consumption were estimated to be -1.1, -1.1, 0, -2.0 for beer, wine and spirits beverage, and absolute (total) alcohol consumption, respectively. These elasticity estimates and the degree to which prices explained consumption trends in the regression equations, suggest that price had a strong effect on alcohol consumption in New Zealand during the period investigated. Thus, the current taxing policy, in which excise tax is indexed to inflation, is deemed a useful tool for preventing an increase in alcohol consumption and alcohol-related problems.