Crampton on minimum prices

July 11th, 2012 at 7:57 am by David Farrar

Eric Crampton blogs:

Last week, anti-alcohol advocacy group Alcohol Action NZ put out a press release where the University of Otago’s Jennie Connor was quoted:

“A recent Canadian study has shown that a 10% increase in the minimum price of alcohol reduces its consumption by 16% relative to other drinks”.

Eric did something very unusual then.

I got in touch with one of the authors of what has to be the study to which she’s referring. 

Chris Auld reported that the -1.6 price elasticity figure indeed only refers to a measure of own-price elasticity. Except it isn’t quite own-price elasticity. Because the estimation technique doesn’t correct for substitution effects, it combines the own-price elasticity with cross-price elasticity from other products. 

Eric then starts quoting formulas which will turn off neurones in most people, but they are there if you want to read them.

Chris also confirms that the -0.34 estimate is the one that best reflects the expected effects of an across-the-board price increase like minimum pricing

That means a 10% increase in prices would reduce consumption by 3.4%. Eric concludes:

Jennie Connor really should retract her press release or issue a correction. It leads people to believe that a minimum price will have far more effect on harmful drinkers’ consumption than can be supported by the evidence. Otherwise, how much weight should anybody place on any “fact” claimed by Jennie Connor in her press releases?

But to show he is balanced (and Eric is one of those guys who is all about the facts), he sides with Ross Bell of the Drug Foundation over John Key re the impact of minimum pricing on the quality of drink. But he also corrects Ross on a couple of things also. A post well worth reading.

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Alcohol action exposed

September 13th, 2011 at 2:14 pm by David Farrar

Some lobby groups are issue driven, and legitimately criticise the Government for things they disagree with. There are other groups that become so partisan than no matter what, they just attack the Government.

Alcohol Action has just shown today that it is now obsessed with attacking the Government, regardless of the situation.

They put out two press releases today.  The first was at 11.01 am:

Government in urgency, set to bury their weak Alcohol NON-Reform Bill by the end of the week

 Is the Government trying to bury its impotent response to New Zealand’s heavy drinking culture by quickly and quietly passing the Alcohol Reform Bill under cover of the Rugby World Cup?

 “It looks as if the Government wants the Alcohol Reform Bill done and dusted by Friday,” says Alcohol Action spokesperson Prof Doug Sellman.

So in this press release, Alcohol Action attacks the Government for trying to pass the alcohol reform bill this week. They incidentally got their facts wrong – all the Government has done is schedule the second reading for today – there is no urgency planned for this week for the bill.

Then a second press release at 12.46 pm:

Government working hard, but not to pass their weak Alcohol NON-Reform Bill by the end of the week, or by the end of the year …

“The situation is worse than we originally thought and it now looks as if the Government will leave the Alcohol Reform Bill still hanging at the end of this current Parliament,” says Alcohol Action spokesperson Prof Doug Sellman.

So now in this press release, they attack the Government for not getting the law rammed through in the dying stages of Parliament.

They stand exposed as a lobby group who will attack the Government, no matter what the Government does. So why should they be listened to, when the Government knows that nothing they do will please them.

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