The role of health economics in alcohol policy

In a 2010 editorial, Doran and Jainullabudeen[1] outlined the potential role health economics can play in the development and implementation of alcohol policy. In particular, efficiency can be attained when the negative externalities due to alcohol consumption can be reduced and where the socially optimum level of alcohol is consumed. A socially optimum level can be thought of as one where the marginal cost of reducing associated harm is equal to the marginal benefit from reduced harm.[2] This optimum level requires an assessment of both supplyside factors (availability, marketing and price of alcohol) and demand-side factors (taste, willingness, preferences and income) and the interactions of these factors in minimizing alcohol misuse.[3]