– What is the policy question?– What costs and benefits are included?– Some examples– How easy are they to replicate in – Costs can be just those costs falling on governments, these costs with any otherimpacts generally given in money terms or anyimpact that can be valued in money terms forexample loss of life, fear of crime – Private borne by individuals/families– External borne by others– Social = private + external – What are the costs of alcohol at a specific time period compared to the situation wherethere was no alcohol? – Is there evidence that there are excess costs – Is a policy good value for money compared to – Both revenue and welfare benefits are  Benefits of having an alcohol industry – Jobs and other “benefits” of an industry follow consumer spending patterns and not seen as independent – as consumers spend differently  Could argue main costs of loss of life to individual drinkers and their families and should be excluded  Argument is that loss of life is a loss of productive worth in an economy – productivityloss. Valued by loss of life time earnings  But this valuation gives lower value to women,  Could argue that loss of life is a “cost” to the whole society and value by “willingness to pay” –yields much higher values £1,144,890 comparedto £147,187 for UK  Can be a substantial research exercise  But for health, international reviews and  Crime and workplace costs need local data  Figures can be used for other types of  Question is at a moment in time, with current alcohol policies, is there evidenceof excess costs.
 Part of the study may be to compare any Implications of different assumptions: 1.
 There is a case for ignoring individual  Economic models are generally based on therefore family consequences may also be  Policies that lead to an involuntary change  Alcohol consumers are not aware of the consequences and therefore cannot act intheir own best interests – there is apotential gain in overall welfare (reductionin social costs) if governments act toreduce consumption  Models would therefore include a value for the costs to individuals and their families  At the extreme end if people cannot make rational decisions and get no benefit fromtheir consumption, the resources beingdevoted to the production and distributionof the goods consumed in thesecircumstances could yield more socialbenefits if used for some other good  However, some would argue that addiction does not preclude all benefit or all choice –the rational addiction model  Clear economic case for policy action as cost of illness with addition ofmany private costs, e.g. Fenoglio et al(2003)  What are all the costs and consequences  Most developed in health care fields, explicit cost effectiveness criteria in a treatment – benefits greater than costs – industry e.g. school education costly and  Expensive well conducted research studies  Add on studies to existing research, e.g.
 Modelling using systematic reviews of the data and local resource estimates, e.g.
Slattery et al (2003) Example of local policy simulation - Scottish Treatment Simulation (Slattery et al, 2003) Net health care cost perdeath averted, £  Estimating the financial burden of alcohol through cost of illness studies is a way of sacrificed to the issue of current financial many interventions, even of limitedeffectiveness, save resources needed, a lot can be done withlimited data


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