Wednesday, February 04, 2015

Irish Alcohol Consumption in 2020

Drink blitz sees bottle of wine rise to €9 minimum 'Irish people still drink an annual 11.6 litres of pure alcohol per capita, 20pc lower than at the turn of the last decade. The aim is to bring down Ireland's consumption of alcohol to the OECD average of 9.1 litres in five years' time.'

What would Irish alcohol consumption be if current trends continue? Knowing this the effectiveness of new measures can be estimated.

The OECD figures are here. I put them in a .csv here.The WHO figures for alcohol consumption are here I loaded the data in R Package

datavar <- read.csv("OECDAlco.csv")

attach(datavar)

plot(Date,Value,

     main="Ireland Alcohol Consumption")
Which looks like this

Looking at that graph alcohol consumption rose from the first year we have data for 1960 until about 2000 and then started dropping. So if the trend since 2000 continued what would alcohol consumption be in 2020?

'Irish people still drink an annual 11.6 litres' I would like to see the source for this figure. We drank 11.6 litres in 2012 according to the OECD. I cannot find OECD figures for 2014. In 2004 we drank 13.6L the claimed 20pc reduction of this is 10.9L, not 11.6L. Whereas the 14.3L we drank in 2002 with a 20pc reduction would now be 11.4. This means it really looks to me like the Independent were measuring alcohol usage up to 2012.

Taking the data since 2000 until 2012.

newdata <- datavar[ which(datavar$Date > 1999), ]

detach(datavar)

attach(newdata)

plot(Date,Value,

     main="Ireland Alcohol Consumption")

cor(Date,Value)

The correlation between year and alcohol consumption since 2000 is [1] -0.9274126. It look like there is a close relationship between the year and the amount of alcohol consumed in that time. Picking 2000, near the peak of alcohol consumption, as the starting date for analysis is arguable. But 2002 was the start of this visible trend in reduced alcohol consumption.

Now I ran a linear regression to predict based on this data alcohol consumption in 2015 and 2020.

> linearModelVar <- lm(Value ~ Date, newdata)
> linearModelVar$coefficients[[2]]*2015+linearModelVar$coefficients[[1]]
[1] 10.42143
> linearModelVar$coefficients[[2]]*2020+linearModelVar$coefficients[[1]]
[1] 9.023077
> 
This means based on data from 2000-2012 we would expect people to drink 10.4 litres this year. Reducing to drinking 9 litres in 2020. So with current trends Irish alcohol consumption will be lower than 'the aim is to bring down Ireland's consumption of alcohol to the OECD average of 9.1 litres in five years'.

There could be something else that is going to alter the trend. One obvious one would be a glut of young adults. People in their 20 drink more than older people. If there are a higher proportion of youths about then the alcohol consumption will rise all else being equal. So will there be a higher proportion of people in their 20s in 5 years time?

The population pyramids projections for Ireland are here. Looking at these there seems to have been a higher proportion of young adults in 2010 than there will be in 2020 which would imply lower alcohol consumption

it would be interesting to see the data and the model that the prediction of Irish alcohol consumption are based on. And to see how minimum alcohol pricing changes the results of these models. But without seeing those models it looks like the Government strategy is promising current trends to continue in response to a new law.

6 comments:

Julie said...

The WHO figures for alcohol consumption are where? link broken for me

David Curran said...

sorry Julie I have fixed the broken link now. The WHO figures are a bit different so I thought it was worth including them.

Paul Rubin said...

A linear regression is probably safe in the short term, but in the long term it would take mean consumption below zero. People regurgitating previously consumed alcohol does not paint a pretty picture. (I speak from personal experience.) Somewhere along the line, the rate of decline will itself decline. I'm not sure whether that skews the 2020 projection enough to matter.

David Curran said...

Thanks for the comment Paul

>A linear regression is probably safe in the short term, but in the long term it would take mean consumption below zero.

I agree. I do not think looking at a trend from 2000-2012 and predicting out to 2020 is very reliable.

But the new law will come in sometime in the future. So the trend will be 2000-2015 predicting till 2020.

If the observed trend kept going for the 2+ years the data still has to come in on the prediction for the remaining years seems more solid.

I do not think this model is that good. But I would like to see the one being used to base policy on. Raising the price will reduce consumption. PED of alcohol is well studied. Any model of this changes effect should include that

Which is probably a new blogpost

http://www.tcd.ie/Economics/msceps/courses/understanding%20markets/8.%20Gallet%202007%20Alcohol%20elasticities%20meta%20analysis.pdf

The Beer Nut said...

Excellent piece. Can you give us the figures in your projection for each year between 2013 and 2020?

David Curran said...

Thanks for that John. The figures by this simple model are

2013 10.98
2014 10.70
2015 10.42
2016 10.14
2017 9.86
2018 9.58
2019 9.30
2020 9.02