Minimum Unit Pricing for Alcohol

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Recommended: Negative impacts of alcohol

The government has recently shelved a proposal for a minimum unit price for alcohol. For the purpose of this assignment I will be examining the economic theories behind the decision such as demand, supply and elasticity. Along with this I will be discussing the likely economic effects that a minimum price on alcohol could have .
Firstly I should look at the elasticity of alcohol relative to a person's income shown in figure 1. From this diagram it is clear that alcohol consumption has increased by 5 litres in the period between 1960 and 2000. This is as in 1960 you find that the average price of alcohol, relative to their income would be approximately 220 units which leads to 6 litres of alcohol being consumed by the average person. This is in comparison to in 2000 when we see that the price of alcohol relative to income is now approximately 90 units, this decrease in price has lead to the litres of alcohol consumed by the average person rising to approximately 11 litres. This shows that the more alcohol a person is able to afford the more alcohol they will drink.

Figure 1: Alcohol consumption in relation to income. (Publication in Parliament 2010)
This suggests that a minimum pricing on alcohol would be successful in lowering health problems and tackling alcoholism. I am now going to look at the health costs that are associated with alcohol consumption. Alcoholism can lead to many problems such as high blood pressure, stroke, coronary heart disease and cirrhosis of the liver.

Figure 2 Cirrhosis of the liver in relation to alcohol consumption. (Publication in Parliament 2010)
From this graph there is a clear correlation between cases of cirrhosis and the amount of alcohol consumed within a country. Countries that tend t...

... middle of paper ...

...y have drew this conclusion as there is not sufficient enough evidence to enforce this policy.

Bibliography
Parliament. (2013). Prices: taxes and minimum prices. Available: http://www.publications.parliament.uk/pa/cm200910/cmselect/cmhealth/151/15114.htm. Last accessed 19/11/2013.
Boseley, S. (2013). Minimum unit price for alcohol proposal shelved. Available: http://www.theguardian.com/society/2013/jul/17/minimum-unit-price-alcohol-shelved. Last accessed 19/11/2013.
House of Commons Briefing Paper (2013) a Minimum price for alcohol? House of Commons Library Note SN/HA/502. Available: www.parliament.uk/briefing-papers/commons-standard-notes/health-services-and-medicine/alcoholism/2013
Drink Aware. (2013). Alcohol dependence. Available: http://www.drinkaware.co.uk/check-the-facts/health-effects-of-alcohol/mental-health/alcohol-dependence. Last accessed 19/11/2013

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