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Economic presentation, spring 2010

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Page 1: Economic presentation, spring 2010
Page 2: Economic presentation, spring 2010

A summary presentation of the following research:

Wagenaar, Alexander C., PhD. Mildred M. Maldonado-Molina, PhD, and Bradley H. Wagenaar, BA, Effects of Alcohol Tax Increases on Alcohol-Related Disease Mortality in Alaska: Time-Series Analyses From 1976-2004 2009 Am J Public Health 99 no8 2009

As it relates to the textbook:

Kendall, Diana Sociology in Our Times, Seventh Edition 2008

Thomson Wadsworth;

Textbook adopted in the Introduction to Sociology Class;

Spring Semester 2010, Section 380, Edison State College,

Charlotte Campus; Instructor: John R. Carlson, Ph.D.

Page 3: Economic presentation, spring 2010
Page 4: Economic presentation, spring 2010

While also in part addressing a

question posed at the end of the

course:

The degree to which the five primary

institutions in the U.S. (Marriage and

Family, Economic, Political System,

Education and Religion) in the U.S.

Operate in terms of the Rights and

Freedoms that are posited in our

Constitution.

Page 5: Economic presentation, spring 2010

A scientific discipline is described as a specialized body of knowledge

that is based on theory, hypotheses, observations, and problems which

are explained by empirical research.

The three components of science, as discussed in the course are:

1) the use of the scientific method;

2) the two branches being applied and pure

comprise the field; by pure, research is conducted to further

knowledge about a subject matter, while this knowledge often yield

practical benefit, namely, the applied outgrowth of the research;

3) and science adheres to a basic code of ethics.

- bias toward maximizing objectivity with respect to how the

research is conducted, how the variables are measured and the

manner in which the data is analyzed;

- treatment of the source of information, namely, human beings,

requires that such ethical standards as maintaining the subjects

privacy is preserved.

Page 6: Economic presentation, spring 2010

. Functionalists view the economy as a

vital social institution because it is the

means by which needed goods and

services are produced and distributed.

(Kendall, 430)

This study measures the relationship of

the effects of alcohol tax related to the

incidence of alcohol related disease

and mortality rates in Alaska

Page 7: Economic presentation, spring 2010

Functionalist Perspective of Economy and

Work in the U.S.

•Functionalists view the economy as a vital social

institution, Our constitution, emphasizing freedom of

choice, balance of power, etc., serve as guiding

principles for how our institutions should collectively

operate (aka homeostasis).

•When the economy runs smoothly, society functions

more effectively.

•If the system becomes unbalanced, such as when

demand does not keep up with production, a

maladjustment occurs.

Page 8: Economic presentation, spring 2010

The authors indicated that more than

100 studies have examined the

relationship between alcoholic

beverage prices (or alcohol tax rates

as a surrogate for prices.) and various

indices of sales or consumption of

alcohol

Page 9: Economic presentation, spring 2010

According to the supply and demand

aggregate, when price/tax levels

increase there is a decrease in alcohol

sales/consumption. This leads to the

result of inflation

Page 10: Economic presentation, spring 2010

Apparent Short-comings of this study

The fact that the article is only looking at Alaska

and that Alaska has one of the highest rates of

alcohol related incidents seems bias.

Alaska is indeed a unique state in terms of its

geography, economic base and the like.

However, as Dr. Carlson pointed out, scientific

inquiry is by definition very focused in terms of the

Subject that is investigated;

Understanding this relationship in Alaska can be

extended to other states, to see if similar findings

unfold;

In essence, knowledge builds upon other

knowledge.

Page 11: Economic presentation, spring 2010

METHODS

Research Design

We utilized a time-series quasi-experimental

design, which is similar to an experiment in that

it is intended to identify the effect of an

intervention while using comparison data sets

to rule out or control for possible alternative

explanations for the effect.

Page 12: Economic presentation, spring 2010

Data Collection

Data on alcohol tax rates in Alaska were

collected from a number of sources. The Alcohol

Policy Information System provides

summaries of US state and federal tax rates for

multiple classes of alcoholic beverages, details

on changes in rates, full legal citations, and text

from the relevant codified statutes, starting

with calendar year 2003 .47-'9

Data for the period prior to 2003 were collected by experienced

research attorneys who used standard

legal research methods to search the records of

codified statutes in Westlaw databases (http://

www.westlaw.com, fee-based membership) when

available, and who searched law library hardcopy

materials for earlier years.

Page 13: Economic presentation, spring 2010

Data on alcohol-related mortality outcomes

were based on death-certificate data recorded

by the National Vital Statistics System of the

National Center for Health Statistics. which

includes all deaths occurring within the United

States.

We obtained the complete annual data

set containing 1 record on each deceased person

for each year from 1976 through 2004

from the National Bureau of Economic Research.

5" From these data we created quarterly

counts of deaths stratified by underlying cause of

death, first for Alaska and then for the other

states as a group

Page 14: Economic presentation, spring 2010

We cumulated counts by cause of death into

3 outcome variables. (1) Alcohol-caused mortality,

which represents all deaths caused by

diseases for which the alcohol-attributable

fraction is 1.0 (e.g., alcoholic liver disease,

alcohol-induced chronic pancreatitis, alcohol

psychoses, alcohol abuse, alcohol dependence

syndrome, alcoholic polyneuropathy, alcoholic

cardiomyopathy, alcoholic gastritis, and acute

alcohol poisoning).

(2) Alcohol-related mortality,

which represents all deaths caused by

diseases with alcohol-attributable fractions

0.35 and higher but less than 1.0 (i.e., other

cirrhosis; cholelithiasis; acute and chronic

pancreatitis; malignant neoplasms of the

mouth, pharynx, esophagus, liver, and breast;

epilepsy; and cardiovascular diseases including

hypertension, ischemia, arrhythrnia, cerebrovascular

disease, and ischemic and hemorrhagic

stroke).

(3) The third variable is the sum

of the first 2 variables.

Page 15: Economic presentation, spring 2010
Page 16: Economic presentation, spring 2010

There is an inverse relationship between Price/Tax level and Alcohol

Sale/Consumption, this means that when the price level decreases

the sales/consumption of alcohol increases.

Page 17: Economic presentation, spring 2010

If the prices increase and the usage decreases, there should be a

decrease in mortality rates.

Page 18: Economic presentation, spring 2010

The increase of taxes decreases the

mortality rate in the previous

chart…..temporarily….so we think……

Page 19: Economic presentation, spring 2010
Page 20: Economic presentation, spring 2010

Price is a direct relationship correlation and is always increasing

because of the increase of the money supply in the economy. (Data

extracted on: April 15, 2010 (2:40:18 PM))

Page 21: Economic presentation, spring 2010

There was a significant decrease in mortality after a tax increase was implemented.

The temporary decrease is a result of several outlier variables such as population and frequency.

Results show statistically significant reductions in the numbers of deaths caused by alcohol related disease beginning immediately after the 1983 and 2002 alcohol tax increases in Alaska.

Page 22: Economic presentation, spring 2010

Should we then conclude that for promoting the welfare of the citizenry, the imposition of so-called aggressive sin taxes is justifiable?;

In other words, punishing financially those who adopt such poor life-style choices as excessive alcohol consumption at face value seemingly counters their negative desires.

Page 23: Economic presentation, spring 2010

However, an interesting point of reference was not made

in this article regarding government policy; the lessons

learned from the prohibition era in this country.

Prohibition was a period of nearly fourteen years of U.S. history in which the manufacture, sale, and transportation of

liquor was made illegal. It led to the first and only time and

amendment to the U.S. Constitution was repealed.

After the American Revolution drinking was on the rise. The

anti prohibition movement gained strength and was

repealed by the masses. The stock market crash in 1929 and

the beginning of The Great Depression gave way for the 21st

amendment repealing the 18th in order to stimulate the economy; reinstate alcohol commerce.

Page 24: Economic presentation, spring 2010
Page 25: Economic presentation, spring 2010

It is paradoxical that we learned in class on one hand

our government provide financial incentives to further

state sponsored gambling, a practice that has ruined

many financially, leading to other deviant practices

(i.e., prostitution, loan sharking, etc.,), while taxing

cigarettes and alcohol; even wanting to impose a tax

on those that can afford so called cadillac health

insurance coverage.

We grapple with such issues, and all of us should

certainly consider scientific findings to make sense of

the world around us; to take such information into

account in directing our views and actions.

However, in turn though, an understanding of our

country’s heritage and basic principles for which our

country was founded provide an important context for

defining the practical side of much of the scientific

research findings we have before us.

Page 26: Economic presentation, spring 2010

Furthermore, drawing from one of the basic premises of

psychology, a social scientific field that was briefly described in

class, as we discussed how sociology is one of the social sciences,

we learned that negative reinforcement is not as powerful in

affecting desirous behavior as is when positive reinforcers result

when one engages in desired conduct;

Hence taxing, being a negative reinforcer is not expected to be

as powerful a motivator as when positive reinforcement is utilized

For example, with respect to the health care debate addressed in

class, we remain in this country given our fee for service based

health care delivery system, operating with the notion that

symptoms are treated and charged, while relatively little attention

is devoted to prevention.

Health care premiums, should they not be differentially assigned

based on one’s overall health condition; especially those

conditions that surface as a result of life style choice. In other

words, provide financial incentive for not being an alcoholic as

opposed to taxing those that use alcohol

Page 27: Economic presentation, spring 2010