Given this evidence, increases in the prices of alcoholic beverages appear to be an effective policy for reducing alcohol consumption and its consequences. In reality, however, alcoholic beverage prices have declined relative to the prices of other goods and services for most of the past 50 years. This price decline is the result in large part of the infrequent and relatively small changes in Federal and State taxes. Based on the evidence presented here, it appears likely that this decline in real prices has kept alcohol consumption and many of the problems associated with alcohol use and abuse at levels higher than they would otherwise be.
