Alcohol - negative externalities of consumption and production.

There have been a lot of excellent resources on this blog relating to the different approaches that the government might take to reduce the negative externalities of excessive alcohol consumption. But most of them (for example, taxes and minimum prices) also affect those who enjoy modest amounts of alcohol such as a glass of wine (or two) with dinner. Why should these people pay a much higher price when they do not cause any negative externalities?

If I buy a nice bottle of wine from an off-license for a dinner party then I might think that I have nothing in common with drunken youths causing all manner of negative externalities. But a new study shows that like or not, I am involved in some way. This article explains how liquor outlets themselves have negative externalities of production - rates of serious crime double within 900 metres of an off-license. The more liquor stores an area has, the more likely it is to have a higher rate of serious violent crime, regardless of poverty and other factors. So even if I am not committing any crimes it seems that anything that reduces all people’s ability to buy alcohol from these shops (and reduce their profitability) will lead to a more socially desirable level of output.Therefore all consumers of alcohol from these outlets should contribute towards this goal. Your thoughts?

In any case, I am sticking with the argument that small amounts of alcohol actually has positive externalities of consumption - evidence here!

But perhaps Homer Simpson puts it best…