Drinking nation: have we had enough?

For economists, alcohol is a normal good; a put-the-price-up-and-demand-goes-down type of good.1 But for many people (too many?) alcohol is “normal” and “good” in the more colloquial sense. In his introduction to the UK government’s latest alcohol strategy, Prime Minister David Cameron focused on erratic and excessive imbibing: “Binge drinking isn’t some fringe issue, it accounts for half of all alcohol consumed in this country. The crime and violence it causes drains resources in our hospitals, generates mayhem on our streets, and spreads fear in our communities.”2 So, have we had enough, and is the government’s adoption of the economist’s solution—raising the (minimum) price of alcohol1—the answer?

In 2010, UK households spent around £42.1bn (€50.9bn, $66.6bn) on alcohol through off-sales (£15.2bn) and in restaurants and hotels (£26.9bn). This is equivalent to around 3% of the gross domestic …