Economic Effects of Alcohol Abuse
Excessive drinking and alcoholism cost society billions each year. This includes health-related costs, the impact of alcohol-related crimes, and the lost productivity resulting from alcohol-related illnesses and premature death.
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Significance
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According to a 2000 report for the National Institute of Alcohol Abuse and Alcoholism (NIAAA), part of the National Institutes of Health, alcohol abuse costs the U.S. economy an estimated $134 billion a year. The economic burden is borne not only by those who abuse alcohol, but also by the government, private insurers, and the victims of alcohol-related crimes and accidents. The NIAAA estimated that less than half of the economic costs are borne by alcohol abusers themselves.
Medical costs
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Health-related costs include the costs of treating alcoholism and alcohol dependency, as well as the medical costs of treating alcohol-related diseases, such as cirrhosis of the liver. Treatment of alcohol dependency and diseases that result from alcohol abuse imposes billions in costs on health care systems and insurance carriers. These costs are passed on to individuals and employers in the form of higher medical costs and health insurance premiums.
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Productivity effects
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In addition to direct medical costs, alcohol abuse costs the economy in terms of lost productivity. Lost productivity also includes lost earnings resulting from work that is missed due to alcohol-related illness or disease. The lost productivity that results from alcohol abuse is difficult to measure precisely because of the lack of data on goods and services not produced.
Legal effects
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Alcohol abuse also imposes costs on the criminal justice system. Law enforcement officials and legal authorities spend millions investigating and prosecuting alcohol-related offenses, including drunken driving and alcohol-fueled violence.
Premature Deaths
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Premature deaths that result from alcohol abuse are another category of economic cost. This area is the subject of controversy because it involves assigning a monetary value to human life. Some estimates measure the cost in terms of lost future earnings resulting from premature deaths.
Considerations
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NIAAA researchers point out that although it is possible to estimate the economic costs of alcohol abuse, it is impossible to measure with precision. For this reason, estimates vary widely across studies.
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