An Economic Analysis of a Rise in Alcopops Tax

An Economic Analysis of a Rise in Alcopops Tax

Joy Gu

Contents

1. Introduction……………………………………………………………………….4

2. Government Policy and Tax……………………………………………………..4 2.1 Taxation……………………………………………………………………….4 2.2 Bans on alcohol advertising………………………………………………….5 2.3 Brief interventions for reducing hazardous alcohol consumption………...6

3. Supply and Demand……………………………………………………………...7 3.1 The Demand Curve…………………………………………………………..7 3.2 Shifts in the Demand Curve…………………………………………………7 3.3 Demand and Supply Together……………………………………………….8 3.4 The Demand of Substitute Goods…………………………………………....9

4. Elasticity………………………………………………………………………….10 4.1 Inelastic Demand……………………………………………………….……11 4.2 Elastic Demand………………………………………………………………11 4.3 Education and Negative Advertising……………………………………….13

5. Consumers, Producers and Market Efficiency………………………………..14 5.1 Consumers……………………………………………………………………14 5.2 Producer……………………………………………………………………...15 5.3 Market efficiency…………………………………………………………….16

6. Conclusion…………………………………………………………..……………18

Reference……………………………………………………………………....……19

The survey of 23,000 people found the proportion of the general population drinking alcohol daily fell slightly and the number of people abstaining from alcohol climbed from 9.3% to 10.1%.
The alcohol industry seized on the survey to suggest that alcohol abuse was not getting worse. Stephen Riden, spokesman for the Distilled Spirits Industry Council of Australia, which represents alcohol manufacturers, said the study showed Australians were moderating their alcohol consumption.
"We do have too many people who abuse alcohol, but the problem is not worsening as many people would believe," he said.
But David Templeman, the chief executive of the Alcohol and Other Drugs Council of Australia, said he feared the survey had underestimated the scale of the alcohol problem. "Things are improving, but there's a hell of a lot more to be done,"