Academics slam result of study into alcohol abuse

BY MIKE HOULAHAN
Last updated 05:00 18/06/2009

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The Ministry of Health and the ACC are standing by the findings of an alcohol-harm study, despite a review of the report that says the study has "few redeeming features".

The $135,000 study, commissioned by the ministry and the ACC, was compiled by Wellington-based economic consultants Business and Economic Research Ltd (BERL).

The study's findings have been savaged by economists Eric Crampton, of the University of Canterbury, and Matt Burgess, from Victoria University, in a review released yesterday.

The study put the annual social cost of alcohol abuse at $4.79 billion, but Crampton and Burgess said their research found the cost was $146 million.

They also found fault with BERL's analysis and methodology, and said the report had elementary errors and misunderstandings of economics.

Crampton said the review was not an attack on the issues of alcohol and drug abuse.

"These are deep problems, but rather than being taken seriously they have instead been trivialised by numbers that beg the question," he said.

BERL economist Ganesh Nana, one of the authors of the report, defended his work, saying the university economists had "a different world view" from his colleagues.

"We used the method used by all in the field looking at the cost of alcohol and other addictive substances. That method has been used widely across the world," he said.

"It really does depend on whether you believe, in a nutshell, that consumers are rational in their decisions about how much alcohol to drink.

"Most of us are - we're not saying we aren't - but there is a significant subset of the population who aren't, and that's where the costs lie."

Barbara Phillips, group manager of the Health Ministry's minimising harm group, said: "The ministry is aware that other studies have been conducted using different assumptions which put a different cost on alcohol and illegal drugs," she said.

"The ministry will consider the relevance of those studies in future policy work."

ACC general manager of injury prevention Katie Sadleir said the corporation had just received the review and was not able to comment yet.

"However, from ACC's perspective, we do know that alcohol is a factor in many of the claims we receive," she said.

"Our own research a few years ago found that up to 22 per cent of all ACC claims had alcohol as a contributing factor. Given that we pay nearly $3 billion a year in claims, that means the cost of alcohol-related claims to ACC alone is around $650 million each year."

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