Economic presentation, spring 2010


Published on

submitted by a member of the economic group

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Economic presentation, spring 2010

  1. 1. A summary presentation of the following research: Wagenaar, Alexander C., PhD. Mildred M. Maldonado-Molina, PhD, and Bradley H. Wagenaar, BA, Effects of Alcohol Tax Increases on Alcohol- Related Disease Mortality in Alaska: Time-Series Analyses From 1976- 2004 2009 Am J Public Health 99 no8 2009 As it relates to the textbook: Kendall, Diana Sociology in Our Times, Seventh Edition 2008 Thomson Wadsworth; Textbook adopted in the Introduction to Sociology Class; Spring Semester 2010, Section 380, Edison State College, Charlotte Campus; Instructor: John R. Carlson, Ph.D.
  2. 2. While also in part addressing a question posed at the end of the course: The degree to which the five primary institutions in the U.S. (Marriage and Family, Economic, Political System, Education and Religion) in the U.S. Operate in terms of the Rights and Freedoms that are posited in our Constitution.
  3. 3. A scientific discipline is described as a specialized body of knowledge that is based on theory, hypotheses, observations, and problems which are explained by empirical research. The three components of science, as discussed in the course are: 1) the use of the scientific method; 2) the two branches being applied and pure comprise the field; by pure, research is conducted to further knowledge about a subject matter, while this knowledge often yield practical benefit, namely, the applied outgrowth of the research; 3) and science adheres to a basic code of ethics. - bias toward maximizing objectivity with respect to how the research is conducted, how the variables are measured and the manner in which the data is analyzed; - treatment of the source of information, namely, human beings, requires that such ethical standards as maintaining the subjects privacy is preserved.
  4. 4.  . Functionalists view the economy as a vital social institution because it is the means by which needed goods and services are produced and distributed. (Kendall, 430)  This study measures the relationship of the effects of alcohol tax related to the incidence of alcohol related disease and mortality rates in Alaska
  5. 5. Functionalist Perspective of Economy and Work in the U.S. •Functionalists view the economy as a vital social institution, Our constitution, emphasizing freedom of choice, balance of power, etc., serve as guiding principles for how our institutions should collectively operate (aka homeostasis). •When the economy runs smoothly, society functions more effectively. •If the system becomes unbalanced, such as when demand does not keep up with production, a maladjustment occurs.
  6. 6. The authors indicated that more than 100 studies have examined the relationship between alcoholic beverage prices (or alcohol tax rates as a surrogate for prices.) and various indices of sales or consumption of alcohol
  7. 7. According to the supply and demand aggregate, when price/tax levels increase there is a decrease in alcohol sales/consumption. This leads to the result of inflation
  8. 8. Apparent Short-comings of this study The fact that the article is only looking at Alaska and that Alaska has one of the highest rates of alcohol related incidents seems bias. Alaska is indeed a unique state in terms of its geography, economic base and the like. However, as Dr. Carlson pointed out, scientific inquiry is by definition very focused in terms of the Subject that is investigated; Understanding this relationship in Alaska can be extended to other states, to see if similar findings unfold; In essence, knowledge builds upon other knowledge.
  9. 9. METHODS Research Design We utilized a time-series quasi-experimental design, which is similar to an experiment in that it is intended to identify the effect of an intervention while using comparison data sets to rule out or control for possible alternative explanations for the effect.
  10. 10. Data Collection Data on alcohol tax rates in Alaska were collected from a number of sources. The Alcohol Policy Information System provides summaries of US state and federal tax rates for multiple classes of alcoholic beverages, details on changes in rates, full legal citations, and text from the relevant codified statutes, starting with calendar year 2003 .47-'9 Data for the period prior to 2003 were collected by experienced research attorneys who used standard legal research methods to search the records of codified statutes in Westlaw databases (http://, fee-based membership) when available, and who searched law library hardcopy materials for earlier years.
  11. 11. Data on alcohol-related mortality outcomes were based on death-certificate data recorded by the National Vital Statistics System of the National Center for Health Statistics. which includes all deaths occurring within the United States. We obtained the complete annual data set containing 1 record on each deceased person for each year from 1976 through 2004 from the National Bureau of Economic Research. 5" From these data we created quarterly counts of deaths stratified by underlying cause of death, first for Alaska and then for the other states as a group
  12. 12. We cumulated counts by cause of death into 3 outcome variables. (1) Alcohol-caused mortality, which represents all deaths caused by diseases for which the alcohol-attributable fraction is 1.0 (e.g., alcoholic liver disease, alcohol-induced chronic pancreatitis, alcohol psychoses, alcohol abuse, alcohol dependence syndrome, alcoholic polyneuropathy, alcoholic cardiomyopathy, alcoholic gastritis, and acute alcohol poisoning). (2) Alcohol-related mortality, which represents all deaths caused by diseases with alcohol-attributable fractions 0.35 and higher but less than 1.0 (i.e., other cirrhosis; cholelithiasis; acute and chronic pancreatitis; malignant neoplasms of the mouth, pharynx, esophagus, liver, and breast; epilepsy; and cardiovascular diseases including hypertension, ischemia, arrhythrnia, cerebrovascular disease, and ischemic and hemorrhagic stroke). (3) The third variable is the sum of the first 2 variables.
  13. 13.  There is an inverse relationship between Price/Tax level and Alcohol Sale/Consumption, this means that when the price level decreases the sales/consumption of alcohol increases.
  14. 14.  If the prices increase and the usage decreases, there should be a decrease in mortality rates.
  15. 15.  The increase of taxes decreases the mortality rate in the previous chart…..temporarily….so we think……
  16. 16.  Price is a direct relationship correlation and is always increasing because of the increase of the money supply in the economy. (Data extracted on: April 15, 2010 (2:40:18 PM))
  17. 17.  There was a significant decrease in mortality after a tax increase was implemented.  The temporary decrease is a result of several outlier variables such as population and frequency.  Results show statistically significant reductions in the numbers of deaths caused by alcohol related disease beginning immediately after the 1983 and 2002 alcohol tax increases in Alaska.
  18. 18.  Should we then conclude that for promoting the welfare of the citizenry, the imposition of so-called aggressive sin taxes is justifiable?;  In other words, punishing financially those who adopt such poor life-style choices as excessive alcohol consumption at face value seemingly counters their negative desires.
  19. 19. However, an interesting point of reference was not made in this article regarding government policy; the lessons learned from the prohibition era in this country. Prohibition was a period of nearly fourteen years of U.S. history in which the manufacture, sale, and transportation of liquor was made illegal. It led to the first and only time and amendment to the U.S. Constitution was repealed. After the American Revolution drinking was on the rise. The anti prohibition movement gained strength and was repealed by the masses. The stock market crash in 1929 and the beginning of The Great Depression gave way for the 21st amendment repealing the 18th in order to stimulate the economy; reinstate alcohol commerce.
  20. 20. It is paradoxical that we learned in class on one hand our government provide financial incentives to further state sponsored gambling, a practice that has ruined many financially, leading to other deviant practices (i.e., prostitution, loan sharking, etc.,), while taxing cigarettes and alcohol; even wanting to impose a tax on those that can afford so called cadillac health insurance coverage. We grapple with such issues, and all of us should certainly consider scientific findings to make sense of the world around us; to take such information into account in directing our views and actions. However, in turn though, an understanding of our country’s heritage and basic principles for which our country was founded provide an important context for defining the practical side of much of the scientific research findings we have before us.
  21. 21. Furthermore, drawing from one of the basic premises of psychology, a social scientific field that was briefly described in class, as we discussed how sociology is one of the social sciences, we learned that negative reinforcement is not as powerful in affecting desirous behavior as is when positive reinforcers result when one engages in desired conduct; Hence taxing, being a negative reinforcer is not expected to be as powerful a motivator as when positive reinforcement is utilized For example, with respect to the health care debate addressed in class, we remain in this country given our fee for service based health care delivery system, operating with the notion that symptoms are treated and charged, while relatively little attention is devoted to prevention. Health care premiums, should they not be differentially assigned based on one’s overall health condition; especially those conditions that surface as a result of life style choice. In other words, provide financial incentive for not being an alcoholic as opposed to taxing those that use alcohol