Alcohol dependence and the price of alcoholic beverages

This study estimates the impact of the price of alcoholic beverages on latent dimensions of current alcohol dependence and abuse. A three-part econometric model is used to estimate the impact of price on three latent dimensions (factors). For heavier drinking, the estimated price elasticity is -1.325 (P=0.027); for physical and other consequences of drinking, -1.895 (P=0.003); for increased salience of drinking, -0.411 (P=0.339). For a single latent factor characterized simply as dependence/abuse, estimated price elasticity is -1.487 (P=0.012). These results suggest that higher prices for alcohol reduce important dimensions of current alcohol dependence and abuse.