Dollar Drinks and Risky Sex

To combat drunkenness, Halifax raised drink prices at bars.  Will this also reduce unsafe sex and STI's?

In December 2007, the city of Halifax decided that it had had enough rowdiness and started to impose minimum drink prices at bars in town bringing an end to dollar drinks in the city. It turns out that these laws might have a secondary beneficial effect, that of lowering risky sex and STI rates in the city. In order for this to be the case all of the following must be true:

1) Higher drink prices lower alcohol consumption for some people. 2) Some people engage in risky behavior only when they have been drinking. 3) The same people who reduce their alcohol consumption when prices go up are the people who engage in risky alcohol-induced sex.

Point one seems straightforward. If people reduce their alcohol consumption when prices go up then economists would say demand for alcohol is "price elastic." Not everyone’s demand is elastic though; for example, people with higher incomes probably don’t change their consumption just because drinks are a buck fifty more (I personally don’t want to consume a drink, or anything else for that matter, that costs a buck so if anything my consumption would be higher with the higher price). Elasticity also depends on the availability of substitutes for drinks in bars. In this case there is a perfect substitute which is to go to the liquor store and load up on cheaper drinks at home before heading out. If either of these are the case, that people have enough income that they don’t really care about the price of drinks or if they are taking advantage of a cheaper alternative, then maybe an increase the price of drinks won’t decrease drunkenness, in which case we would expect no effect of an increase in drink prices on either rowdiness or risky sex.

The second point that drunkenness leads to poor choices seems to be what academics like to call "intuitively appealing," which is code for: Come on, that has to be true, right?

The final point is that the same people who reduce their alcohol consumption would need to be the same ones engaging in risky sex. So, who engages in risky sex? It turns out that seniors in resorts in Florida do, but they are probably not being affected by the policy (we can talk about naughty grannies another day). My students in Nova Scotia seem to think that they have a monopoly on risky sex (for example they tell me that their generation has more sex than any other generation—which always makes me smile). As much as I try to dissuade them of this point, I think in this case they may be right, certainly when it comes to a night of risky sex that started in a bar in downtown Halifax. If not students, at least young single people.

So what does the research tell us? Recent research using Canadian data* reports that a 1% increase in the price of beer lowers gonorrhea and Chlamydia rates by about 0.8%. This implies that people do respond to an increase in beer prices by reducing the level of risky sex. Other studies have found even larger effects using US data. So if we care about STI rates in Halifax, this looks encouraging in light of the new policy.

There is a reason to be a bit skeptical, though, and it goes back to what I was saying earlier about income and price elasticity. The bars that had dollar drinks are largely frequented by students. Students may not have high incomes but they tend to behave like people who do. This makes me think that patrons probably didn’t reduce their alcohol consumption by much when the drink price increased. There is another possibility as well and that is that people don’t get drunk and make poor choices but that people get drunk so that they CAN make poor choices. On a flyer posted next to the elevator in the Life Sciences building at Dalhousie University, where I teach, someone has written under the heading “Why do you drink?” the words “So I can get laid.” That pretty much sums up that argument. If this is the case then the question is not how elastic is the demand for drinks but how elastic is the demand for risky sex. I bet we can figure that out, but it will have to be a question for another day.

*Anindya Sen and May Luong, "Estimating the Impact of Beer Prices on the Incidence of Sexually Transmitted Diseases: Cross-Province and Time Series Evidence from Canada," Contemporary Economic Policy, Vol. 26, No. 4, October 2008, pg. 505-517.

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