The Long-Run Effects of a Public Policy on Alcohol Tastes and Mortality

Abstract

We study the long-run effects of Russia’s anti-alcohol campaign, which dramatically altered the relative supply of hard and light alcohol in the late 1980s. We find that this policy shifted young men’s long-run preferences from hard to light alcohol decades later, and we estimate the age at which consumers form their tastes. We show that the large beer market expansion in the late 1990s had similar effects on young consumers’ tastes, while older consumers’ tastes remained largely unchanged. We then link these long-run changes in alcohol consumption patterns to changes in male mortality. The shift from hard to light alcohol reduced incidences of binge drinking substantially, leading to fewer alcohol-related deaths. We conclude that the resulting large cohort differences in current alcohol consumption shares explain a significant part of the recent decrease in male mortality. Simulations suggest that mortality will continue to decrease by another 23 percent over the next 20 years due to persistent changes in consumer tastes. Program impact evaluations that focus only on contemporaneous effects can therefore severely underestimate the total effect of such public policies that change preferences for goods. (JEL D12, H25, H31, I12, I18, L66, P36)