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Economic impacts

A number of studies have attempted to calculate the cost of alcohol to society. This is tricky for two reasons. First, because many of the costs are difficult to estimate accurately. Second, because there is significant debate around which types of cost to include. The lack of a definitive set of criteria means that there is no single figure representing the cost of alcohol consumption to the UK.

The Government regularly cites the number £21 billion in relation to alcohol costs – this represents the ‘external’ cost of alcohol to society in England and Wales: the costs imposed by drinkers upon others, excluding any personal impact. Standard economic theory suggests that this should be the basis for setting alcohol taxes. However, this number remains controversial, and many groups, including IAS, have called for it to be updated or revised.

Click on links opposite to view each section of the factsheet online, or click on the image below to download the entire factsheet as a PDF (updated April 2016):