Equity in household spending on alcoholic beverages in South Africa: assessing changes between 1995 and 2011

Mayara Fontes Marx,John E Ataguba,Nadine Harker,Leslie London

doi:10.1186/s12939-019-0985-3

Mayara Fontes Marx, John E Ataguba + Show 2 more

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https://doi.org/10.1186/s12939-019-0985-3

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Abstract

BackgroundGlobally, alcohol consumption accounts for a substantial burden of disease, which translates into high social and economic costs. To address this burden, several policies (e.g. age and trading hour restrictions, increasing alcohol taxation) were implemented. Despite the existence of these policies evidence shows that alcohol misuse and alcohol-related harms have increased in South Africa over recent years. The objective of this paper is to assess progressivity and the changes in progressivity of alcohol expenditure at the household level in South Africa using datasets that span 15 years.MethodsData come from the 1995, 2000, 2005/06 and 2010/11 South Africa Income Expenditure Survey. Distribution of spending on alcoholic beverages were analyzed using standard methodologies. Changes in progressivity between 1995 and 2000, and between 2005/06 and 2010/11 were also assessed using the Kakwani index.ResultsAlcohol spending was regressive between 1995 and 2011 as the fraction of poorer households’ expenditure spent on alcohol beverage exceeds that for the richest households. Also, the difference in Kakwani indexes of progressivity indicates that spending on alcoholic beverages has become less regressive between the same time periods.ConclusionThe results show no evidence that alcohol policy including taxation increased regressivity. Thus, there is an opportunity to further reduce the regressivity using coherent alcohol policies. This paper concludes that there is a need for further research to unpack why alcohol spending became less regressive over the years that goes beyond just looking at changes in the distribution of alcohol expenditure.

Highlights

Alcohol consumption accounts for a substantial burden of disease, which translates into high social and economic costs
Spending on alcoholic beverages in South Africa remained regressive, albeit declining, between 1995 and 2010/11. This is because the fraction of consumption expenditure spent on alcoholic beverages remained higher for poorer households compared to richer households
If the South African government continues its gradual increase in alcohol taxation rates, this could continue to have a pro-poor effect on progressivity

Summary

Introduction

Alcohol consumption accounts for a substantial burden of disease, which translates into high social and economic costs. Regulatory alcohol policies that aim to reduce affordability of alcohol beverages are widely used and are considered one of the most cost-effective strategies to decrease alcohol consumption and alcoholrelated harms [3]. These price-base policy interventions are based on the premise that if the demand for alcohol is price elastic, by increasing alcohol prices, Fontes Marx et al International Journal for Equity in Health (2019) 18:78 consumers will consume less alcohol due to budget constraints. Overall spending on alcohol might be reduced, but alcohol consumption and alcohol-related harm may not decline Another example of unanticipated and undesirable effects of price increases is when consumers reallocate money that would be spent on some other household items to maintain the same level of alcohol consumption as before the increase in tax. Alcohol policies that aim to decrease affordability may not be equitable if alcohol taxes are regressive, meaning the poor pay proportionately more alcohol taxes than the rich when compared to their shares of income [5, 6]

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