The Economic Costs of Alcohol Abuse
The welfare, if not the survival, of alcohol agencies depends largely
on promoting the widespread belief that the economic costs caused
by alcohol abuse are enormous and growing rapidly. ”Federal
estimates for the costs of alcohol abuse come perilously close to
fiction - or even fraud.” 1
Economists David Heien and sociologist David Pittman, utilizing
standard accounting methods, determined that the annual societal
costs of drinking to be about 7% of the federal estimate. 2
Alcohol agencies typically distort the costs of alcohol abuse by
basing estimates on questionable assumptions, by confusing correlation
with causality, by looking only at costs while ignoring the economic
benefits of alcohol and by not using sound accounting principles.
3
However, the agencies' seriously flawed and inflated estimates are
routinely presented to the American public as factual knowledge.
4
For example, the National Institute on Alcohol Abuse and Alcoholism
(NIAAA) presents a clearly deceptive and misleading picture of the
economic costs of alcohol abuse. Its estimate is actually of gross
costs rather than net costs. 5
That is, the NIAAA statistic adds up all costs (including large
“phantom” or false costs) without subtracting the economic
benefits provided by alcohol beverages. These include income to
the producers of commodities and equipment used in producing alcohol
beverages, income of those who produce, distribute and sell alcoholic
beverages, profits, taxes generated, and many other economic benefits
to tens of millions of Americans. 6
One false cost the NIAAA uses to inflate its costs of abuse is
based on “lost productivity, “ which accounts for about
80% of the total estimate.
Economist Steven Barsby illustrates the deception: Take, for
example, a Manhattan advertising executive who leaves a hefty
annual salary of $225,000 for a high school teaching position
in rustic Vermont that pays $25,000 per year. Is t here a loss
of $200,000 through the executive's working career to society?
Of course not. Yet this is the nonsense which NIAAA wants us to
believe. 7
These self-serving inflated estimates are used to justify the call
for ever higher budgets, larger staffs, and more far-reaching legislation.
References
- 1. Ford, Gene. Alcohol
Abuse: The Economic Cost (https://www.alcoholproblemsandsolutions.org/Controversies/1104197649.html)
- 2. Ford, Gene. Alcohol
Abuse: The Economic Cost (https://www.alcoholproblemsandsolutions.org/Controversies/1104197649.html)
- 3. Wiener, Carolyn. The
Politics of Alcoholism. New Brunswick, NJ: Transaction Books,
1981, pp. 185-188; Ford, Gene. The Benefits of Moderate Drinking:
Alcohol, Health and Society. San Francisco, CA: Wine Appreciation
Guild, 1988, pp. 134-165.
- 4. Heien, Dale M., and
Pittman, David J. The economic costs of alcohol abuse: An assessment
of current methods and estimates. Journal of Studies on Alcohol,
1989, 50, 567-579.
- 5. National Institute
on Alcohol Abuse and Alcoholism (NIAAA). Teacher’s Guide (“Information
about Alcohol” section). Understanding Alcohol: Investigations
in Biology and Behavior. Washington, DC: NIH Curriculum Supplement
Series - Grades 7.
- 6. Hanson, David J. Government’s
“Alcohol Information” (https://www.alcoholproblemsandsolutions.org/Controversies/1088530194.html)
- 7. Ford, Gene. Alcohol
Abuse: The Economic Cost (https://www.alcoholproblemsandsolutions.org/Controversies/1104197649.html)
Readings
- Barsby, S. A review of the Heien and Pittman study on the costs
of alcohol abuse, Moderation Reader, 1990 (January/February).
- Bloss, E. The economic cost of FAS. Alcohol Health & Research
World, 1994, 18, 53-54.
- Cook, P. Social Costs of Drinking. In: Assland, O.G. (Ed.) Expert
Meeting on the Negative Social Consequences of Alcohol Use.
Oslo, Norway: Norwegian Ministry of Health and Social Affairs, August
27-31, 1990, pp. 49-94.
- Ford, Gene. The Benefits of Moderate Drinking: Alcohol, Health
and Society. San Francisco, CA: Wine Appreciation Guild, 1988,
pp. 134-165.
- Heien, D. The external costs of alcohol abuse, Journal of Studies
on Alcohol, 1996, 57, 336-342.
- National Institute on Alcohol Abuse and Alcoholism (NIAAA). Teacher’s
Guide (“Information about Alcohol” section). Understanding
Alcohol: Investigations in Biology and Behavior. Washington, DC:
NIH Curriculum Supplement Series - Grades 7.
- Rice, Dorothy P. The economic cost of alcohol abuse and alcohol
dependence: 1990. Alcohol Health & Research World,
1993, 17, 10-11.
- Weinberg, R. Benefits of alcohol use wash out the costs of use
says noted economist, Moderate Drinking Journal, 1987,
1(5).
- Wiener, Carolyn. The Politics of Alcoholism. New Brunswick,
NJ: Transaction Books, 1981, pp. 185-188.