Government Bans On TV, Radio Ads For Alcohol Do Not Reduce Alcohol Consumption

October 5, 2001

University Park, Pa. -- Tough government bans on TV and radio advertising for alcoholic beverages in developed countries have not affected people's alcohol consumption at all, researchers say.

Dr. Jon P. Nelson, professor of economics, and Dr. Douglas J. Young, professor of economics at Montana State University-Bozeman, studied bans on broadcast advertising from 1977 to 1995 in countries that are members of the Organization for Economic Cooperation and Development, a consortium of major developed countries organized to expand world trade and improve quality of life.

Their findings are published in the paper, "Do Advertising Bans Work? An International Comparison," in the fall issue of the International Journal of Advertising: The Quarterly Review of Marketing Communications.

Researchers statistically compared the per capita alcohol consumption rates in the following areas:

-- countries with no bans on broadcast advertising of alcohol beverages (Australia, Italy, Luxembourg, the Netherlands and Portugal);

-- countries that ban broadcast advertising of distilled spirits (Austria, Belgium, Canada, Ireland, Spain, the United Kingdom and the United States) and;

-- countries that prohibit broadcast advertising of all alcoholic beverages, apart from light beer (Denmark, Finland, France, Norway and Sweden).

"The Scandinavian countries are particular strict in monitoring use of alcohol. Apart from the most comprehensive advertising bans, they not only have state stores but state manufacturers and breweries, but they also have tough drunk-driving laws," Nelson notes. "However, alcoholic consumption in the Scandinavian nations is no less than in countries with only partial bans or no bans, after we control for other influences on drinking."

Moreover, countries with complete bans on broadcast advertising of alcohol do not show any reduction in two key indicators of alcohol abuse, alcohol-related motor vehicle fatalities and cases of cirrhosis of the liver, he adds.

As a rule, alcohol advertising does not increase overall levels of drinking but rather reinforces customer loyalty to a particular brand or undermines that loyalty through price competition, says Nelson.

Policy makers who view TV and radio advertising as a cause of alcohol abuse, especially among teenagers and young adults, should look at other factors that may contribute to binge drinking, drunk driving and other dire consequences of alcohol abuse, the researchers explain.

Over the past two decades, a noticeable decline in drinking has taken place in many parts of the developed world, with per capita consumption of pure alcohol dropping in the United States by 21 percent and Canada by 29 percent between 1981 and 1995.

The Penn State economist says, "The decrease in alcohol consumption can perhaps be attributed, at least in part, to changing real incomes, spells of higher unemployment, demographic changes, healthier lifestyles, aging populations (people drink less as they age) and an advertising-induced substitution effect that causes people to buy more expensive beverages but drink less beer in general. This last effect is often overlooked by analysts."

In their analysis, Nelson and Young controlled for such factors as the price of alcoholic beverages, national per capita income, annual unemployment rate, per capita number of tourist arrivals, the percentage of total population that is 65 years old and older, the percentage of the population between 15 and 24 years of age and the degree of wine consumption.

Their paper is scheduled to appear in the book, "Advances in Applied Microeconomics, Volume 10: Advertising and Differentiated Products," edited by Nelson and M.R. Baye (Amsterdam: JAI Press & Elsevier Science, 2000).

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Contacts:

Paul Blaum (814) 865-9481 pab15@psu.edu

Vicki Fong (814) 865-9481 vfong@psu.edu

EDITORS: Dr. Nelson is at (814) 865-8871 and jpn@psu.edu by email.