Cost of alcohol: better data will be justified if it is put to better use

The paper by Bhattacharya [1] is motivated, at least in part, by the misuse of alcohol cost data in discussions related to alcohol duty [2]. While it introduces some welcome clarity to this debate, there is a wider question of whether alcohol costs, however defined, are the sole issue in setting duty rates. Such an approach seems to be based on the notion that the only justification for levying duty on alcohol is to correct the market for these external costs.

In the United Kingdom, as in most countries, alcohol duty is not a hypothecated tax; i.e. the revenue raised is for general public spending and not reserved for the specific purpose of dealing with alcohol-related harms. If taxing alcohol is considered solely as a revenue-raising instrument then it is interesting to note that this would have the approval of that great, liberal icon John Stuart Mill on the basis that revenue-raising by the state is necessary, and it is better to tax those things that are least essential [3]. Moreover, the market for alcohol is characterized by so many departures from the idealized economic model that it raises doubts about why correcting for externalities should be given such priority.