The rhetoric of restricting the choice of the poor

By Matt Nolan 05/06/2014

Via Gareth Morgan on twitter I spotted the following post from the University of Otago Public Health blog.

The money quote:

They found that the biggest impact of a minimum price policy was on “harmful” drinkers in the lowest income quintile (7.6% reduction in alcohol), whereas the impact on harmful drinkers in the highest income quintile was modest (1%). Consumption fell by 1.6% among “responsible” drinkers in the lowest income quintile. That is, the impact is concentrated among low-income harmful drinkers.

Moreover, this Lancet paper found that “Individuals in the lowest socioeconomic group (living in routine or manual worker households and comprising 41·7% of the sample population) would accrue 81·8% of reductions in premature deaths and 87·1% of gains in terms of quality-adjusted life-years.” In the public health field, we seldom see policy packages that have such a notable impact on reducing health inequalities. [** Further comment at end].

The gains come from putting a minimum price of alcohol that prices the poor out from consumption.  Consumption that has a benefit – something that is ignored constantly.

Talk about evidence all you want (a lot hopefully – as evidence is central, and I respect the PHB for bringing empirical research up so constantly), but if your ethical framework places zero benefit on consumption choices of the poor your policy conclusion will be restricting the choice of those in poverty – always.

Given I expect some random comment like “you are assuming perfectly rational choice” from people, I’ll cover that upfront.  No I’m not, not even close.  I’m asking us to actually allow for the fact some benefit may exist – rather than setting it to zero.  And that those who are poor actually have the right to some agency.  It is the assumptions of those who want to restrict choices that are extreme, and that should be due to more scrutiny.

If we want to help those most in need, surely our focus needs to be on opportunity, capability, and treatment – not on taking away their choices.  A minimum price of alcohol works by “pricing out” the poor, limiting their choice set, and thereby removing choice.

This isn’t nit-picking, it is a central point about policy relevance – totally and completely central.

Update: Eric Crampton notes a bunch of posts regarding the issue in this tweet:

Update 2:  I was a bit late reading NZ econ blogs this week, and only just came across this from Eric at Offsetting – it is very good, and very relevant.  I am fundamentally and centrally concerned with how economics language is being used to link descriptive analysis and policy in a lot of modern literature – in a way that involves strong, and obfuscated, moral judgements.

0 Responses to “The rhetoric of restricting the choice of the poor”

  • All pricing restricts the pricing of all people Matt. Its facile to make the argument of individual choice and agency if you don’t look at the broad outcomes of those choices and the lack of choice that they then provide to related parties.

    Its no surprise for example that family violence is strongly linked to both poverty and alcohol consumption both individually and more damaging in tandem. Feel free to let me know the details of the cost/benefit equation on that lot, but I’m sure the lack of agency enjoyed by those receiving the violence of alcohol-consumers is not a “benefit”.

    I accept that in rationally controlled quantities, the use of alcohol can have benefits – hell, I’m a user and I presume I’m rational about it (to some degree).

    The entirely rational approach then would seem to be a logarithmic scale of tax based on individual consumption since we know that moderate use has relatively little harm and some benefits, while heavy use has much greater harm and few benefits. Now all we need is the microchip under the skin and individual tracking to measure and control it all…

    Big brother anyone?

  • Aston, there is a difference between asking questions about costs and benefits and turning around and say we should set policy based on a measured subset of these.

    The benefits that get ignored, and many of the “costs” that get included, are factors that result from individual agency – and questions of individual responsibility. It would be strange for me to ignore that when discussing policy, and so thought it would be apt to point out that it seems strange when others do that.

    “I accept that in rationally controlled quantities, the use of alcohol can have benefits – hell, I’m a user and I presume I’m rational about it (to some degree).”

    There is something missing here – if there is abuse, why is the individual abusing the substance? What are the functional causes of this individuals behaviour? Minimum pricing is an instrument predicated on the harm coming from the drinking without considering this question (and ignored any perceived benefit).

    For example, say that someone is abusing alcohol because they are stressed from status good competition and being overworked. A minimum price cuts their income, and merely makes this driver worse – implying they may turn around and increase expenditure on alcohol, or substitute to other more harmful substances.

    Failures that occur in the instance of individual agency and choice cannot be simply solved through a single observed price, unless we can clearly define the market failure – which is only a subset of ways this could occur. If it is instead a mental health issue, or a result of psycho-social stress, our naive price adjustments will do more harm than good.

    In truth, we need to stop just thinking about products as harmful – and start considering the actual reasoning used by individuals and the reasons why that may be harmful. I feel strange saying this as an economist, but it really isn’t all about prices 😉

  • Thanks Eric, “Beer before bread” the idea has merits.

    I have a deep dislike to the approach of punishing everyone for the problems caused by a few. So what is in effect a punititve tax is a problem for me.

    Additionally (from the other thread), if the negative impacts are from alcoholism and poverty then surely direct support for those affected would be more effective than an indirect intervention, such as increased cost.

  • Totally agree with that Matt. I was going to head there in my post, but ran out of time, knowledge and skills…