TY - JOUR
T1 - Off-premises demand elasticities for pure alcohol in five Latin American countries
T2 - The case of Argentina, Chile, Costa Rica, Honduras, and Uruguay: Off-premises alcohol demand in five Latin American countries
AU - Paraje, Guillermo
AU - Araya, Daniel
AU - Monteiro, Maristela
N1 - Publisher Copyright:
© 2024
PY - 2024/2
Y1 - 2024/2
N2 - Background and Aims: There is ample evidence from high-income countries that fiscal policies such as alcohol taxes can affect the consumption of alcohol by increasing alcohol prices. In the case of Latin American countries, much less is known about how sensitive alcohol demand is to alcohol price changes. This study aims to expand the evidence base on the sensitivity of off-premises pure alcohol demand to price and expenditure increases in five Latin American countries: Argentina, Chile, Costa Rica, Honduras, and Uruguay, which have different socioeconomic profiles and alcohol consumption patterns. Design and setting: Cross-sectional study Measurements: The price and expenditure elasticities were estimated using an Almost Ideal Demand System (AIDS). Own price and expenditure elasticities for off-premises pure alcohol were estimated using representative household surveys, which collect data on households' expenses to construct the consumer basket of goods and services used to calculate the consumer price index (CPI) for the country. Findings: Own price elasticities of off-premises pure alcohol for all countries were negative, inelastic, and significant at 1 %. They were -0.418 for Argentina; -0.656 for Chile; and for Costa Rica, Honduras, and Uruguay, they were equal to -0.608, -0.509, and -0.32, respectively. Expenditure elasticities were positive and significant at 1 %, except for Costa Rica, which was significant at 10 %. They were equal to 0.865 in Argentina; 0.943 in Chile; 1.182 in Costa Rica; 0.874 in Honduras; and 0.857 in Uruguay. Elasticities for Costa Rica should be interpreted cautiously, as there is insufficient geographical price variability to identify the demand correctly. Conclusions: Results were consistent with previous literature for countries from other regions. Governments should expand this study to measure total demand elasticities to improve the design of alcohol tax policies.
AB - Background and Aims: There is ample evidence from high-income countries that fiscal policies such as alcohol taxes can affect the consumption of alcohol by increasing alcohol prices. In the case of Latin American countries, much less is known about how sensitive alcohol demand is to alcohol price changes. This study aims to expand the evidence base on the sensitivity of off-premises pure alcohol demand to price and expenditure increases in five Latin American countries: Argentina, Chile, Costa Rica, Honduras, and Uruguay, which have different socioeconomic profiles and alcohol consumption patterns. Design and setting: Cross-sectional study Measurements: The price and expenditure elasticities were estimated using an Almost Ideal Demand System (AIDS). Own price and expenditure elasticities for off-premises pure alcohol were estimated using representative household surveys, which collect data on households' expenses to construct the consumer basket of goods and services used to calculate the consumer price index (CPI) for the country. Findings: Own price elasticities of off-premises pure alcohol for all countries were negative, inelastic, and significant at 1 %. They were -0.418 for Argentina; -0.656 for Chile; and for Costa Rica, Honduras, and Uruguay, they were equal to -0.608, -0.509, and -0.32, respectively. Expenditure elasticities were positive and significant at 1 %, except for Costa Rica, which was significant at 10 %. They were equal to 0.865 in Argentina; 0.943 in Chile; 1.182 in Costa Rica; 0.874 in Honduras; and 0.857 in Uruguay. Elasticities for Costa Rica should be interpreted cautiously, as there is insufficient geographical price variability to identify the demand correctly. Conclusions: Results were consistent with previous literature for countries from other regions. Governments should expand this study to measure total demand elasticities to improve the design of alcohol tax policies.
KW - Alcohol
KW - Alcohol policy
KW - Alcohol taxes
KW - Excise taxes
KW - Health taxes
KW - Latin America
UR - http://www.scopus.com/inward/record.url?scp=85182556742&partnerID=8YFLogxK
U2 - 10.1016/j.drugpo.2024.104316
DO - 10.1016/j.drugpo.2024.104316
M3 - Article
C2 - 38219676
AN - SCOPUS:85182556742
SN - 0955-3959
VL - 124
JO - International Journal of Drug Policy
JF - International Journal of Drug Policy
M1 - 104316
ER -