Advertising and price effects on adolescent drinking

Heavy advertising on the part of the alcohol industry in the United States has such a considerable influence on adolescents that its removal would lower underage drinking in general and binge drinking in particular. These results come from a study by Henry Saffer and Dhaval Dave*. In addition, Saffer and Dave conclude that large price increases could have a similar effect.

Public health advocates have for many years been claiming that advertising plays an important role in adolescent drinking. Equally vehemently, the alcohol industry has invariably rejected any such connection. The drink companies insist that their advertising is aimed at adults and is intended to influence brand choice and not the initial decision as to whether to begin drinking in the first place. The debate has raged back and forth, often creating more smoke than light.

Saffer and Dave enter into the controversy by carrying out this study which examines underage drinking between 1996 and 1998 as recorded in two thorough, long-established surveys of youth behaviour: the University of Michigan’s Monitoring the Future survey, which effectively samples some 63,000 high school students across the country; and the 1997 National Longitudinal Survey of Youth Behavior, which is carried out by the Federal Bureau of Labor Statistics. Saffer and Dave compare data from these surveys with detailed reports on the prevalence of alcohol advertising in local markets during the same period. These latter data come from Competitive Media Reporting, a well-respected, independent research company which principally works for the advertising industry.

The economic analysis shows that alcohol advertising, the majority of which is aimed at consumers of beer and spirits rather than wine, “has a positive effect” on the decision young people make on whether to drink and on how much they consume having made that decision. In other words, alcohol advertising encourages underage drinking. The researchers found that the relationship is especially pronounced in the case of underage female drinkers.

Saffer and Dave do not claim that the alcohol industry deliberately sets out to target young people. They merely report that, whatever its intention, advertising seems to have influenced the pattern of underage drinking. The analysis “suggests that the complete elimination of alcohol advertising could reduce adolescent monthly alcohol participation from about 25 per cent to about 21 per cent. For binge participation, the reduction might be from about 12 per cent to about 7 per cent.” Binge drinking is defined by most researchers as the consumption of five or more drinks at one session.

Saffer and Dave also consider the effect of pricing on drinking behaviour and reach the conclusion that doubling prices would reduce underage drinking by 28 per cent and underage binge drinking by 51 per cent. “As a result, both advertising and price policies are shown to have the potential to substantially reduce adolescent alcohol participation,” they say.

The authors further point out that at the moment “both the level of alcohol consumption by adolescents and the level of alcohol advertising are considerable.” They quote data from the Monitoring the Future survey which indicates that 7.7 per cent of those in the 8th grade, 21.9 per cent of those in the10th grade, and 49.8 per cent of those in the 12th grade report having consumed alcohol in the past thirty days. Meanwhile, Competitive Media Reporting “estimated that alcohol producers spent about $1.5 billion” on advertisements in 2001, a 25 per cent increase on 1998. Saffer and Dave point out that this figure is for “measured media” only and may account for as a little as a third of total promotional expenditures. It does not include spending on such things as the sponsorship of events, Internet sites, product placement in films, or point-of-purchase advertisements.

* Alcohol Advertising and Alcohol Consumption by Adolescents (NBER Working Paper No. 9482)