Kerry Anne McGeary

What U.S. data should be used to measure the price elasticity of demand for alcohol

This paper examines how estimates of the price elasticity of demand for beer vary with the choice of alcohol price series examined. Our most important finding is that the commonly used ACCRA price data are unlikely to reliably indicate alcohol demand elasticities-estimates obtained from this source vary drastically and unpredictably. As an alternative, researchers often use beer taxes to proxy for alcohol prices. While the estimated beer taxes elasticities are more stable, there are several problems with using taxes, including difficulties in accounting for cross-price effects. We believe that the most useful estimates reported in this paper are obtained using annual Uniform Product Code (UPC) barcode scanner data on grocery store alcohol prices. These estimates suggest relatively low demand elasticity, probably around -0.3, with evidence that the elasticities are considerably overstated in models that control for beer but not wine or spirits prices.

U.S. Alcohol Affordability and Real Tax Rates, 1950–2011

BACKGROUNDnThe affordability of alcoholic beverages, determined by the relationship of prices to incomes, may be an important factor in relation to heavy drinking, but little is known about how affordability has changed over time.nnnPURPOSEnTo calculate real prices and affordability measures for alcoholic beverages in the U.S. over the period from 1950 to 2011.nnnMETHODSnAffordability is calculated as the percentage of mean disposable income required to purchase 1 drink per day of the cheapest spirits, as well as popular brands of spirits, beer, and wine. Alternative income and price measures also are considered. Analyses were conducted in 2012.nnnRESULTSnOne drink per day of the cheapest brand of spirits required 0.29% of U.S. mean per capita disposable income in 2011 as compared to 1.02% in 1980, 2.24% in 1970, 3.61% in 1960, and 4.46% in 1950. One drink per day of a popular beer required 0.96% of income in 2010 compared to 4.87% in 1950, whereas a low-priced wine in 2011 required 0.36% of income compared to 1.05% in 1978. Reduced real federal and state tax rates were an important source of the declines in real prices.nnnCONCLUSIONSnAlcoholic beverages sold for off-premises consumption are more affordable today than at any time in the past 60 years; dramatic increases in affordability occurred particularly in the 1960s and 1970s. Declines in real prices are a major component of this change. Increases in alcoholic beverage tax rates and/or implementing minimum prices, together with indexing these to inflation could be used to mitigate further declines in real prices.

The Impact of State-Level Nutrition-Education Program Funding on Bmi: Evidence from the Behavioral Risk Factor Surveillance System

Currently, there is insufficient evidence regarding which policies will improve nutrition, reduce BMI levels and the prevalence of obesity and overweight nationwide. This preliminary study investigates the impact of a nutrition-education policy relative to price policy as a means to reduce BMI in the United States (US). Model estimations use pooled cross-sectional data at the individual-level from the Centers for Disease Controls (CDC), Behavioral Risk Factor Surveillance System (BRFSS), state-level food prices from the American Chamber of Commerce Research Association (ACCRA) and funding for state-specific nutrition-education programs from the United States Department of Agriculture (USDA) from 1992 to 2006. The total number of observations for the study is 2,249,713 over 15 years. During this period, federal funding for state-specific nutrition-education programs rose from approximately

Will Competitive Bidding Decrease Medicare Expenditures

660 thousand for seven states to nearly

Impact of Comprehensive Smoking Bans on the Health of Infants and Children

248 million for all fifty-two states. In 2011, federal funding for nutrition-education programs reached

Spousal Effects in Smoking Cessation: Matching, Learning, or Bargaining?

375 million. After controlling for state-fixed effects, year effects and state specific linear and quadratic time trends, we find that nutrition education spending has the intended effect on BMI, obese and overweight in aggregate. However, we find heterogeneity as individuals from certain, but not all, income and education levels respond to nutrition-education funding. The results regarding nutrition-education programs suggest that large scale funding of nutrition-education programs may improve BMI levels and reduce obesity and overweight. However, more study is required to determine if these funds are able make the requisite dietary improvements that may ultimately improve BMI for individuals from low income and education-levels.

The Impact of Lending, Borrowing, and Anti-Smoking Policies on Cigarette Consumption by Teens

Recent measures to reduce Medicare spending include the use of competitive bidding in determining reimbursement prices. Several competitive bidding experiments have recently been conducted by The Centers for Medicare and Medicaid Services (CMS) to determine reimbursement prices. This paper investigates the use of competitive bidding to specifically set reimbursement prices for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). First, the competitive bidding process is examined on a theoretical level. It is shown that the CMS competitive bidding process (auction) is inefficient, may actually lead to price increases, and may cause decreases in the quality of services. Next, data supporting the theoretical predictions is analyzed. Finally, we suggest switching to a Vickrey style auction that does not suffer from the problems of the current design.

What U.S. Data Should be Used to Measure the Price Elasticity of Demand for Alcohol

As evidence of the negative effects of environmental tobacco smoke (ETS) has mounted, an increasingly popular public policy response has been to impose restrictions on smoking through 100 percent smoke-free bans (comprehensive smoking bans). Yet sparse information exists regarding the impact these smoking bans at the state and local levels have on the health of children and infants. A rationale for expansion of smoke-free laws implicitly presumes that potential public health gains from reducing adult cigarette consumption and declines in adult ETS exposure extend to children. However, if smokers compensate by shifting their consumption of cigarettes from public venues that impose a comprehensive smoking ban to smoking at home, then these policies may have a harmful effect on children and infants. This study provides estimates of how comprehensive smoking bans impact the venue of smoking, and the health of children and infants. Using models that exploit state- and county-level changes to smoking ban legislation over time, estimates suggest that smoking bans have improved the health of both infants and children, mainly through implementation of more comprehensive bans. Further, we find no evidence of displacement among smokers (both smokers with and without children in the household), and actually find that the bans had a positive spillover effect in terms of reducing smoking inside the home—an effect that may further explain the improvement in infants’ and children’s health. Our effect magnitudes imply that expanding comprehensive coverage from 60 percent (current level) to 100 percent of the population can prevent between approximately 1,110 and 1,750 low birth weight births among low-educated mothers, resulting in economic cost savings of about

The Impact of State-Level Nutrition-Education Program Funding on BMI: Evidence from the Behavioral Risk Factor Surveillance System

71–111 million annually. Health improvements among older children add to these economic benefits.