Tagged: Jon P. Nelson

Sometimes, prices are blunt - The Dismal Science

Eric Crampton Jul 29, 2013

Where the social harms from alcohol consumption are nonlinear and excise is constrained to be linear, any excise tax will wind up being a pretty blunt way of trying to internalise harms. An excise tax that raises revenue sufficient to cover the total social cost imposed will necessarily overtax light and moderate drinkers while undertaxing those imposing larger social harms, … Read More

Inelastic demand - The Dismal Science

Eric Crampton Apr 09, 2013

Gorbachev's crackdown on alcoholism reduced heavy drinking in the former Soviet Union. He combined some measures directly targeting heavy drinkers with price increases and supply reductions. Bhattacharya and coauthors wrote: The results suggest little evidence that our summary measure of campaign intensity operates either through differential supply shifts or through differential price increases. However, we are hesitant to draw conclusions … Read More