Beer consumption and information

I quite like the approach to “reducing beer consumption” suggested here:  tell people what type of food it is equivalent to scoffing down.

By doing this, we increase the information avaliable to the individual when they decide to drink.  As many people seem to be interested in a “healthy diet” or “keeping weight down” telling people that a shot of vodka (or Jager) is like eatting a chocolate bar could have a big impact on their consumption decision.

Information, in conjunction with an appropriate externality tax, and combined with liquour sales mechanisms that allow appropriate pre-commitment by individuals, would lead to awesome outcomes.  As a result, I am keen for this sort of information to be out there.

5 replies
  1. Eric Crampton
    Eric Crampton says:

    When you say externality tax, Matt, I wonder what you’d propose that’s preferable to the current tax. There are huge problems with any linear tax where negative externalities are convex, but it’s well-neigh impossible to improve on it absent microchipping people to keep track of their individual alcohol consumption. I’d argue instead for maintaining the linear tax (not increasing it, not increasing the drinking age, not lowering the alcohol limit for drivers) but combining the current tax with increased penalties for actually being caught doing bad things while drunk. The only real negative externalities from drinking are where folks cause damage to others (persons or property) while drunk where they’d not have done so if sober. So penalize the behaviors!

  2. Matt Nolan
    Matt Nolan says:

    @Eric Crampton

    I agree that there are problems with linear taxes on non-linear externalities. And where it is possible to more direct target the actual behaviour it is preferable.

    However, I was only suggesting it in the abstract – I had no practical externality tax in mind 🙂

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