Sunday, 2 August 2009

Behavioural economics and alcohol limits

Dr Nick Sheron of the Alcohol Health Alliance has objected to the government's publication of daily instead of weekly alcohol limits. But his protest shows a failure to understand both behavioural reasons for the advice, and the economics of alcohol consumption.

First the behavioural aspect:
Dr Sheron says we should go back to using the old weekly limits, which are based on sound research. The 1987 sensible drinking limits, which set the bar at 21 units per week for men and 14 units per week for women, remained in place until 1995.
I have no doubt that, as he says, the medical research was based on the idea of weekly limits and not daily. The problem is that this is not a medical issue. It is a behavioural issue.

The government's objective in publishing the recommended limits is not to give medical advice or influence doctors. It is to change people's behaviour. It's far easier for people to influence their own behaviour through short-term goals and fast feedback, than through longer-term targets and responses.

In simple terms, do you expect anyone to count up to 21 units over the course of a week and then stop drinking? By contrast, counting up to 4 within an evening is quite realistic.

Now there are other valid behavioural concerns here which Dr Sheron could have mentioned. One is the tendency for the limit to be ignored once it is breached. If you are already at five units it's easier to think "what the hell, I've broken the rules already" and drink eight or ten (a similar result is well established with daily calorie counting).

Another valid question is whether this advice has meaningful efficacy at all. I am sure it makes some difference - I sometimes use it myself as a rule of thumb, even if nobody else does - but I don't know whether there have been studies of the overall impact either on median or excessive consumers.

That aside, Dr Sheron makes a pretty fundamental economic mistake:
"The weekly limits were based on robust studies and were set at a level at which alcohol harms outweigh any putative benefit."
No doubt what he is thinking of is the idea that moderate alcohol consumption can be good for the heart, or something like that. But this ignores what is by far the greatest benefit, "putative" or otherwise, of consuming alcohol: people like it.

They like it so much that, not only are they willing to put up with health risks and hangovers, they will actually pay money for the privilege!

Any honest analysis of consumer choice must be based on the fact that people broadly do what they want to, and their choices can be taken as an indication of what they like. Life is - most people would agree - much better when you can do what you enjoy. So it's not really for a doctor to tell us what the benefits of alcohol are.

Choices and preferences of course do arise from the context in which they are made, and the context is influenced by many things: the information available to people, the culture they live in, their own self-discipline, and even the amount of alcohol they have already consumed. I don't take the libertarian view that government should make no interventions in anything: it's entirely appropriate that the government should publish these recommended limits.

But we must remember that these limits are about highlighting the costs of alcohol use. It's much more difficult for policymakers to second-guess the benefits that you get.

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