Supply, Demand and the Excise Term Paper

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Furthermore, it appeared that the consumption of alcoholic beverages among the youth increased throughout the three-year duration of the survey. In terms of the young females (in high school), the drinking path has been described as "an absolute disaster" (Fyfe, 2010). The primary explanation as to why alcopops became even more popular among the youth is given by the inability of the tax to impact the parents -- who in most cases are the very sources of alcohol. "As parents were the primary source of alcohol among current drinkers, their ongoing preference for premixed spirits may not be surprising, as it is likely that these beverages are affordable to most parents, even after the tax increase" (Fyfe, 2010).

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The Australian case of the excise tax on alcopops reveals a limited efficiency in reducing binge drinking among adolescents and it is expected that the same results would be registered within the United States. The tax would have to be extremely high in order to limit the access to the alcopops, but the introduction of such a tax would raise issues of constitutionality from the part of the players in the alcohol industry. Given this situation, the most effective means of reducing binge drinking would be that of education and support......

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