Imposing preferences, politico-religious edition

By Bill Kaye-Blake 12/06/2013

I mentioned my Turkish colleague before. Today, he is sputtering about the new law restricting alcohol. Like many, he makes the link between the legal rules around alcohol sale and consumption, and the push for religious restrictions. This new law indicates that Turkey’s government is moving closer to the religious powers, rather than focusing on keeping the government secular.

I can’t vouch for this post on the law change, but I draw your attention to this statement:

Since alcohol abuse is not really an issue in Turkey (a government study found that 83 percent of adults never even touch a drink and only one percent have a drink every day), at its heart the new alcohol law is a political move.

That ‘government study’ link takes you to a news article with this information:

You may think Turkey has a serious alcohol problem, but according to the Turkish Statistical Institute’s Household Budget Surveys, only around 6 percent of Turkish households consume alcohol. These results are consistent with the Institute’s 2011 Family Structure Survey, which found that 83 percent of Turkish adults never use alcohol. Most of the rest are casual drinkers; less than 1 percent said they drank every day.

I haven’t gone looking for the household surveys, on the assumption that it’ll be too hard to find the right statistic, so I’m accepting this as true (or at least true-ish): alcohol consumption isn’t particularly high in Turkey. As a result, the social costs of alcohol — health, employment, and criminal externalities — wouldn’t be particularly high. And so, we in the West can look at this law change and recognise that it is motivated by religious preferences.

Why can’t we do the same for New Zealand?

I’ve generally stayed away from the alcohol debate on this blog, because it crosses over into my paid work a bit too much. Not that I have to say much — Eric Crampton has done a bang-up job of dealing with the issues in a theoretically consistent way. Once you start working through the various economic analyses and the associated social and medical literature, a few things become clear:

  • people drink booze because they like to, or because it makes things less bad. Either way, it makes them happier than the baseline
  • alcohol is a ‘problem’ for a minority of people and/or on occasion. A few people are dipsos; the average adult occasionally gets blotto. Making the problem out to be more than that is disingenuous
  • price is a stupid way to deal with the externalities. First, by definition addicts are insensitive to price. Secondly, the behavioural response of binge drinkers to increased prices is to cut out the moderate drinking sessions, not the harmful ones
  • the research that shows otherwise is flawed. Crampton’s done the heavy lifting, so go see his work, but I’ll back him up. Poor assumptions, begging the questions, faulty parameters — embarrassing, really.

Just because the alcohol activists in New Zealand aren’t banner-waving members of the CWTU doesn’t make their desire to impose their preferences on the rest of the population any better. We can see it clearly on the other side of the world. Let’s be clear about it at home, too.

0 Responses to “Imposing preferences, politico-religious edition”

  • “price is a stupid way to deal with the externalities. First, by definition addicts are insensitive to price.” – I think the same reasoning can be applied to carbon pricing.

    • I’m going to quibble a bit with Bill on this one: addicts are RELATIVELY insensitive to price; they’re not totally insensitive to price. So where moderate drinkers curb consumption by about 4.4% with a 10% price hike, heavy drinkers only cut back by about 2.8%. That’s not zero, but it does mean that the burden of price measures falls primarily on moderate drinkers.

      The big difference here too is that the biggest negative externalities in alcohol come from those least likely to change their behaviour with price measures. With carbon, it doesn’t matter who cuts back so long as there’s less CO2 emitted.