DP10412 The Cost of Binge Drinking
|Author(s):||Marco Francesconi, Jonathan James|
|Publication Date:||February 2015|
|Keyword(s):||Alcohol, Arrests, Externalities, Health, Road accidents|
|JEL(s):||I12, I18, K42|
|Programme Areas:||Labour Economics, Public Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=10412|
We estimate the effect of binge drinking on accident and emergency attendances, road accidents, arrests, and the number of police officers on duty using a variety of unique data from Britain and a two-sample minimum distance estimation procedure. Our estimates, which reveal sizeable effects of bingeing on all outcomes, are then used to monetize the short-term externalities of binge drinking. We find that these externalities are on average £4.9 billion per year ($7 billion), about £80 for each man, woman, and child living in the UK. The price that internalizes this externality is equivalent to an additional 9p per alcoholic unit, implying a 20% increase with respect to the current average price.