Feeds

Junk science and booze tax - a study in spin

Where's the beer?

Build a business case: developing custom apps

The defective model

The contemporary models he examined estimated the price elasticity of alcohol - the rise or fall in demand when the price changed. These models overlooked a number of variables, Dee found, which overshadowed conventional assumptions about elasticity. Dee also found that differences in alcohol consumption and pricing from state to state had also been overlooked. Once these were included, Dee concluded that "beer taxes have relatively small and statistically insignificant effects on teen drinking".

For the Sheffield study, Dee's work remains an obstacle they can't ignore. After devoting considerable space citing different alcohol elasticities, the researchers grudgingly concedes that there may be what they call a "potential confounding variable" at work here.

"Having taken this potential confounding variable into account, the effect of taxes on drinking disappeared," they admit, before going on to dismiss Dee's work.

Yet they cite evidence showing that he was essentially correct. "Reviews of demand models from 1989 and 1990 in the UK found that the demand for beer, wine, and spirits was generally price-inelastic", they write, undermining the entire point of the excercise. So the evidence stubbornly refuses to provide strong support for the policy direction the academics have been asked to justify.

More surprises follow in the second part of the study - the "model" - where we discover, after all, that "price increases are not matched by consumption reductions and overall spending on alcohol is estimated to increase".

In other words, consumption patterns remain the same, and drinkers absorb the cost. And what about the minimum pricing recommendation, which so captivated our newspapers last week?

"There is little empirical research investigating minimum pricing."

Oh.

The smart choice: opportunity from uncertainty

More from The Register

next story
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
MPs wave through Blighty's 'EMERGENCY' surveillance laws
Only 49 politcos voted against DRIP bill
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Delaware pair nabbed for getting saucy atop Mexican eatery
Burrito meets soft taco in alleged rooftop romp outrage
LightSquared backer sues FCC over spectrum shindy
Why, we might as well have been buying AIR
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.