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Alcohol Pricing an Article Written by Mulled Whines Essay

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According to the World Health Organization, the global consumption of alcohol has been stable since 1990, however, the drinking patterns in rich countries have changed. In the article Alcohol pricing: Mulled whines, the author has given some examples about European young people indulging themselves in drinking outdoors to get drunk. Across much of the rich world, bingeing has become a common drinking habit that people are drinking greater quantities in a single session. Naturally, this shift in drinking patterns from moderate intake only with food to bingeing has boosted the demand for alcoholic beverages in rich countries. Besides, those developed countries have the highest GDP per capita in this world. People there are able to and are willing to spend more on the alcoholic beverages.
It might be good news to the alcohol industry, but it does not sound so good to the governments. The change in the drinking habits has brought not only an increase in demand, but some undesirable social consequences as well. The article gives detailed figures about the negative outcomes resulting from the overuse of alcohol. The drinkers are having long term health problems and are probably facing the threat of death while the whole society has to pay for the increasing road accidents, violence, public order offenses and even murders. The economic loss and the decline in social welfare caused by the alcohol problems are so severe that policy makers wish to address these issues by curbing the alcohol consumption.
The industry has taken some measures to encourage responsible drinking such as stepping up education campaigns and licensing premises. Despite these, health campaigners have asserted that alcoholic beverages are simply too cheap in many cou...


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...ram 1, the consumer surplus is the same in two situations, which is the area C. However, the producer surplus is reduced to the area F under taxation. This comparison between price floor and taxation shows that when consumers have the same surplus, producers under taxation are worse off than they are when a price floor scheme is in effect.
In general, both price floor and taxation will cause loss in consumer surplus and producer surplus. Both buyers and sellers of alcohol will suffer from the economic loss caused by the government intervention. Even responsible drinkers are being punished in both cases while the effects of reducing undesirable social issues brought by drinking problems still remain questionable.

Reference:
Alcohol pricing: Mulled whines (2013, December 21). The Economist. Retrieved from http://www.economist.com/printedition/2013-12-21.













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