Quotulatiousness

May 27, 2014

The argument against raising minimum prices for alcohol

Filed under: Economics, Government, Health — Tags: , , — Nicholas Russon @ 08:37

Earlier this year, A Very British Dude explained why “evidence-based” policy making isn’t actually what it says on the label, and illustrates it with the example of minimum pricing for alcohol:

Who could possibly be against “evidence-based” policy?

The problem is very simple. It’s almost impossible to conduct experiments in the social sciences. No government can alter one economic variable and measure the outcome. The noise to signal ratio is absurdly high. What you’re left with is explanations of the data that may or may not stumble on the actual causality.

Some things are obviously and self-evidently stupid. Socialism for example — high marginal tax-rates, nationalisation, closing down markets where possible in favour of state monopolies failed. And in as perfect an economic experiment as any undertaken, two nations, both shattered by war and populated by Germans went head to head. The Capitalist system turned out to be much, much less shit than socialism. Yet many social “scientists” still seem intent on manufacturing evidence that the solutions once tried in East Germany are not only feasible, but that any other approach is both doomed to failure and wicked.

Instead of evidence-based policy, what you often get is policy-based “evidence”. You have the same political arguments, dressed up in a kind of pseudo scientific hocus-pocus.

Take the “debate” about minimum pricing as a classic example.

First make a heroic assumption. Assume a fall in alcohol consumption per head is desirable (it isn’t, what we want to do is reduce “problem” drinking). Second, ignore the fact that your desired outcome is happening anyway. Third, ignore all the evidence that “problem” drug-takers have a lower elasticity of demand and assume that minimum pricing will mostly affect the consumption by alcoholics. Fourth, express these assumptions in a spreadsheet, with no real-world evidence. Fifth, describe this spreadsheet as a “model“. The zeroth step is, of course to get a university to describe you as “professor” first. Then you’re able to tout your guesswork and call it “evidence”, to politicians, and unmolested by any critical thought on the Today program and be paid handsomely from tax-payers’ funds to make this “evidence” up into the bargain.

So you have an “evidence-based” policy to impose a minimum unit price on Alcohol. It’s regressive, and probably won’t work. It will reduce moderate drinking by sensible people, making them at the margin, unhappier. It is unlikely to reduce problem drinking, but may make problem drinkers substitute clothes, or food, or heating for their more expensive booze. Nice one. Everyone’s poorer.

1 Comment

  1. This succinctly explains the “science” behind anthropogenic global warming.

    Comment by Bill — May 28, 2014 @ 09:08

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