Research to determine how alcohol consumption in New Zealand responds to changes in the price of alcohol has received $95,000 in funding from Te Whatu Ora Health Promotion Agency.
Associate Professor Murat Genç, from the Department of Economics, will use the funding to estimate the percentage change in consumption of alcohol when its price changes by one percent, known as “price elasticity of consumption”.
“The project will be important as it will inform policymakers on how consumers are expected to change their consumption when prices change,” says Associate Professor Genç.
“Estimates like this are significant and could guide the government in how they set their tax rates on alcohol.”
The research will use data collected by Statistics New Zealand on the amount of money households spend on alcohol and will estimate the price elasticity separately for beer, wine, spirits and alcohol, as well as for alcohol in general.
It will also investigate how this price elasticity varies across people from different ethnic groups, and by income.
“Good policies rely on good evidence, and so it is exciting to work on a project that can provide useful empirical evidence on something that is currently unknown in New Zealand,” says Associate Professor Genç.
- Kōrero by the Otago Business School Communications Adviser, Kelsey Schutte.