FINANCIAL COSTS ON SOCIETY BECAUSE OF ALCOHOL USE AND ABUSE.

Financial costs on Society because of Alcohol use and abuse.

Financial costs on Society because of Alcohol use and abuse.

Alcohol abuse and its related problems cost society many billions of dollars each year. Estimates of the economic costs of alcohol abuse attempt to assess in monetary terms the damage that results from the misuse of alcohol. These costs include expenditures on alcohol-related problems and opportunities that are lost because of alcohol. This Alcohol Alert addresses issues pertaining to estimates of the costs of alcohol abuse, focusing on the types of costs considered and on the various problems associated with their estimation.

While many difficulties in cost estimation are common to cost-of-illness studies in other health fields, two problems are particularly relevant to the case of alcohol abuse. First, researchers attempt to identify costs that are caused by, and not merely associated with, alcohol abuse, yet it is often hard to establish causation.

Second, many costs resulting from alcohol abuse cannot be measured directly. This is especially true of costs that involve placing a dollar value on lost productivity. Researchers use mathematical and statistical methods to estimate such costs, yet recognize that this is imprecise. Moreover, costs of pain and suffering of both people who abuse alcohol and people affected by them cannot be estimated in any reliable way, and are therefore not considered in most cost studies.

Cost of Alcohol Abuse

These difficulties underscore the fact that although the economic cost of alcohol abuse can be estimated, it cannot be measured precisely. Nevertheless, estimates of the cost give us an idea of the dimensions of the problem, and the breakdown of costs suggests to us which categories are most costly.

In the most recent cost study, Rice and co-workers estimated that the cost to society of alcohol abuse was $70.3 billion in 1985 (4); a previous study by Harwood and colleagues estimated that the cost for 1980 was $89 billion. By adjusting cost estimates for the effects of inflation and the growth of the population over time, Rice projected that the total cost of alcohol abuse in 1988 was $85.9 billion, and Harwood projected that the cost in 1983 was $116 billion.

Health-Related Costs

To estimate costs of illness, researchers have developed standard categories of costs. Most of the costs of alcohol abuse result from the adverse effects of alcohol consumption on health. The principal categories of health-related costs of alcohol abuse are expenditures on medical treatment (a large proportion of which is for the many medical consequences of alcohol consumption; the remainder is for treatment of alcohol abuse and dependence themselves), the lost productivity that results from workers' abuse of alcohol, and the losses to society from premature deaths that are due to alcohol problems.

The first category of costs is that of treating the medical consequences of alcohol abuse and treating alcohol abuse and dependence themselves. To estimate these costs, Rice and colleagues developed a new procedure. They estimated treatment costs in short-stay hospitals using hospital discharge records, ...