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Tuesday, August 31, 2010

Time to Rethink the Health Benefits of Drinking?

In order to make any kind of coherent public policy, we have to accept certain claims as fact, even when they are only provisionally supported by data. Almost never are these claims purely borne out by the data once it comes in, but often, the claim has become a treasured chestnut as durable as any actual fact. As a consequence, we keep charging forward on bum assumptions.

Owing to a particular mixture of history, religion, and culture, the United States has always had an awkward relationship with alcohol. You recall that dust-up we had in the late teens of the last century, but that was only the most extreme case. The way we think about alcohol sales, alcohol abuse, and alcohol consumption is colored as much by hoary myth and legend as science--abetted by the fact that until the last decade, there wasn't a whole lot of science to refute the myth. But that's changing, and the overwhelming consensus refutes much of what we have believed about alcohol and its affect on society. Time Magazine recounted some of the more surprising recent findings:
But a new paper in the journal Alcoholism: Clinical and Experimental Research suggests that — for reasons that aren't entirely clear — abstaining from alcohol does actually tend to increase one's risk of dying even when you exclude former drinkers. The most shocking part? Abstainers' mortality rates are higher than those of heavy drinkers....

But even after controlling for nearly all imaginable variables — socioeconomic status, level of physical activity, number of close friends, quality of social support and so on — the researchers (a six-member team led by psychologist Charles Holahan of the University of Texas at Austin) found that over a 20-year period, mortality rates were highest for those who had never been drinkers, second-highest for heavy drinkers and lowest for moderate drinkers.
We have to add a few caveats--correlation is not causation, alcoholism remains a real and serious problem, and drunkenness can lead to a host of bad activities--but these don't refute the underlying message: alcohol is not costing society a massive amount of money. In fact, it looks like the biggest costs come from those who never drank at all and who as a consequence live shorter lives than heavy boozers.

So what effect should this have on law? Well, for one thing, it gives anti-alcohol crusaders less cover for non-moralistic rationales to ban hooch. When the beer tax surfaced last year in Oregon (as it does in every legislative session), one of the principal rationales was that the state had an interest in recouping lost revenue due to alcohol-related health problems--a cluster of costs the state pegged at $5.13 billion a year. But these costs arise from the assumption that drinking alcohol is a social ill that the state needs to spend millions combating and treating. If the state thinks of consumption of alcohol as a health benefit and managing drunkenness as a separate legal matter, the picture changes considerably.

The state has a right to recoup the cost of negative externalities of certain behaviors--smoking, for instance, which causes the state to take on massive health expenses related to lung and heart disease. Economists have created a theory of optimal taxation that compensates the state for the costs of these negative externalities such that the tax would recoup exactly the costs of the behavior. So a cigarette tax would pay for all the health-related consequences of smoking. (For those who don't recognize it, I'm just parroting what I learned from economist Patrick Emerson.)

For generations, we have treated alcohol the same way, assuming there are negative health externalities from drinking. Whether or not alcohol is definitely the cause of better health, these studies pretty clearly show that it isn't a negative. There are other reasons to regulate and control alcohol--underage drinking, drunk driving, and domestic violence spring to mind. But we need to separate those out from the idea that booze is bad for you. It's just not. The state has no right to try to recoup health costs from drinkers. And anti-alcohol crusaders need to acknowledge that their beef liquor has nothing to do with health.


  1. I don't have much to add to this as I agree pretty much across the board, but I do have a tiny quibble with this line, and the fact that is preceded by the clause "in fact":

    "In fact, it looks like the biggest costs come from those who never drank at all, who live shorter lives than heavy boozers."

    This seems to indicate that the shorter life span is somehow to blame for the increased costs to society, which it might be given a few things. Obviously not having loved ones around is painful, and going to funerals costs real dollars to somebody, but as everyone is mortal shorter lives merely move the cost to an earlier point; they don't increase it.

    I suspect that you're claiming that shorter lives are more costly because with less productive years, they...well...produce less than those that live longer. But this is only true if abstainers are actually dying during their productive years, which I doubt. I would guess (and I will read the paper when I can get it) that they are actually living less retirement years, which, morbid as it is, be actually saving money as the academic Paul Campos has argued.

  2. I want to quickly add, that even if my critique stands, it doesn't affect your overall argument. I know you know that, but I wanted you to know that I know that too.

  3. Jim, point taken, and I agree.

    Your clarifier raises a whole separate issue of how we account for the costs of long life, and one that has a controversial history. Some years back, a cigarette company actually did a cost analysis and showed that, since their product shortened life, it actually saved the state money. This was controversial just as a matter of science, because the type and cost of death is a huge factor, but obviously a MASSIVE PR fail. How do we balance the value of longer lives to greater expense of taking care of non-earning seniors? A fascinating discussion, and one that I tried to dodge here.

  4. There have actually been a lot of studies taking that approach to tobacco costs, most prominently those undertaken by economist Kip Viscusi. As you say, they were spun as bad PR against the tobacco companies. However the only reason the question became an important issue is that state attorneys general were suing tobacco companies to recover the costs imposed by smokers. It's a morbid question, but given the stakes you can't blame tobacco companies for taking it seriously!

    FWIW the consensus among economists is that cigarettes are over-taxed at this point, even among those who are sympathetic to sin taxes. Viscusi's book Smoke-Filled Rooms is a good overview of the subject.

  5. I think the error in your analysis is, as far as I can tell, you are equating mortality to healthcare costs. I cannot really see a conclusion from this study really bringing those two things together.

    As well, the group represented a very specific cross section of people - i.e. 60% men, between 55 and 65, and having had an outpatient occurrence. In other words, this study can say that for people over 55 who needed medical care, the trend is that mortality is proportionally equal for teetotalers and heavy drinkers (51 to 45% respectively) and relatively larger (to those who drank moderately (23%).

    Beyond that, it would be a stretch to make any significant conclusion.

    And that may be generationally biased as well, as differences in lifestyle between generations certainly will start to change these type of studies conclusions.

    The study's conclusion doesn't reach that far however, as they simply state that moderate drinking seems to be advantageous in this sample study. However, again, it does not fairly represent healthcare costs, and thus no real conclusion regarding the negation of negative externality cost recovery can truly be made.

  6. Hey, who said real economists could comment? This is backseat economics; amateurs only!

    Dann, your point is well-taken; I think we need to know more about the studies and what they say about disease. Mortality, as one data point, doesn't illuminate all.