The efficiency of a volumetric alcohol tax in Australia.

Abstract

BACKGROUND: In Australia and elsewhere, fiscal measures such as alcohol taxation are a commonly used intervention and cost-effective strategy to reduce alcohol consumption and associated harm. However, alcohol taxation policies distort the market for alcohol, specifically increasing the marginal cost of alcohol. It is proposed that a volumetric tax, which taxes alcohol equally across all beverage types, is less distortive of consumer preferences and more efficient at reducing alcohol consumption than the current Australian tax model, where taxes are charged at varying amounts per litre of pure alcohol, depending on the beverage type. OBJECTIVE: This paper quantifies the effect of four differ..