Pet Peeves Thread

[chops_a_must]

The attached chart (taken from a UWA paper on the issue) summarises the observed price elasticity of beer over numerous studies conducted both in Australia and around the world. It clearly shows that beer is very inelastic and that changes in price would have a very small impact on consumption levels.

More economics nonsense.

Just because something is "inelastic" doesn't mean consumption doesn't change. Elasticity being a relative measure, has little meaning in practice anyway, especially in issues such as these.

Anyway, when a bar has a happy hour, do people's drinking habits change? Of course they do. So consumption CAN be changed, that's the whole point.

And by the way, the statement was: "the single best way to reduce the number of people smoking, and the number of ciggarettes smoked is via increased price. The removal of ads, all the education, all the anti-smoking promotion, all the health warnings on packs, had significantly less impact than simple price rises."

It's irrelevant if this or that is price inelastic if price has the biggest impact on consumption, aside from any other factors, and then that becomes the policy of choice. No-one should give a damn if something is price inelastic, it's what affects that individual item most that counts.

By the way, petrol prices are meant to be inelastic as well. But just about everywhere in the world is noticing record public transport patronage. So economists can mull on that as well. Complete price inelasticity indeed.

 

[prawn_86]

No one said anything about complete inelasticity Chops.

As price of inelastic goods rise, demand will fall, but proportionally that fall will be much less than that of an elastic good.

The gov (imo) would be better off spending money on education rather than through tax hikes. Supposedly the money raised will go to education, but i'll believe that when i see it.

Also, why should people who do not binge drink be punished for those who do. Politicians once again saying 'screw you' to the educated people of this nation and doing what will keep the plebs (parents who cannot keep their children under control) happy

 

[rub92me]

1. Having to sit on an 8 hour flight in between two people too large to fit in their seats.
2. When I figured out I could reduce the exposure by insisting on an aisle seat, sitting next to two people that need to go to the toilet every 15 minutes on an overnight flight.
3. The grocer's apostrophe. I saw a great one the other day at my local butchershop. Leg's of lamb 17.90/kg. I kid you not.

 

[chops_a_must]

No one said anything about complete inelasticity Chops.

As price of inelastic goods rise, demand will fall, but proportionally that fall will be much less than that of an elastic good.

That's what I mean when I say it's irrelevant, meaningless and relative. Because you can't compare apples with oranges, they all have their own dynamics. It's what affects things MOST that counts. If it is price, elasticity becomes irrelevant.

The gov (imo) would be better off spending money on education rather than through tax hikes. Supposedly the money raised will go to education, but i'll believe that when i see it.

Mate... do you even read? Or take in?:

And by the way, the statement was: "the single best way to reduce the number of people smoking, and the number of ciggarettes smoked is via increased price. The removal of ads, all the education, all the anti-smoking promotion, all the health warnings on packs, had significantly less impact than simple price rises."

No one said anything about complete inelasticity Chops.

Good, then we all agree that price rises will alter consumption. End of debate


As long as it keeps the wowsers from the door, and allows me to listen to music in a pub after 730pm, I am happy.

As far as I'm aware, the tax is only being applied to pre-mixed drinks anyway. So unless you are a you know what, : then it shouldn't affect you.

 

[doctorj]

More economics nonsense.

Just because something is "inelastic" doesn't mean consumption doesn't change. Elasticity being a relative measure, has little meaning in practice anyway, especially in issues such as these.

Anyway, when a bar has a happy hour, do people's drinking habits change? Of course they do. So consumption CAN be changed, that's the whole point.

And by the way, the statement was: "the single best way to reduce the number of people smoking, and the number of ciggarettes smoked is via increased price. The removal of ads, all the education, all the anti-smoking promotion, all the health warnings on packs, had significantly less impact than simple price rises."

It's irrelevant if this or that is price inelastic if price has the biggest impact on consumption, aside from any other factors, and then that becomes the policy of choice. No-one should give a damn if something is price inelastic, it's what affects that individual item that most that counts.

By the way, petrol prices are meant to be inelastic as well. But just about everywhere in the world is noticing record public transport patronage. So economists can mull on that as well. Complete price inelasticity indeed.

Never said alcohol was completely price inelastic (clearly any non-zero measure shows that demand will change somewhat in response to a price change).

The question really should be is what change in price will it take to have any appreciable impact on alcohol consumption.

Take elasticity at 0.09 - this means that in order to reduce alcohol consumption by 20%, you'd need to increase the price by more than 200%. The latest data I could find is 2004/5 which shows in that year the govt collected $5.1b in taxes from alcohol sales. That's already $230 from every man, women and child in Australia each year.

So, looking at the numbers - if the government increases tax on beer by the same 70% as they did on the lollywater, then consumption is likely to fall by only 6%. Is this really very much?

Is a 6% fall in consumption worth a cost of $3.57BILLION to Australia's taxpayers?

The extra $3.57BILLION the government would collect in such a situation is a hell of a lot of advertising and eduction and what not - what impact would spending that same amount on education have?

This isn't real policy - it's headline grabbing crap.

 

[chops_a_must]

Well, what level of spending on education has an impact on consumption?

Apparently a hell of a lot has to be spent to get the same result.

Anyway, wouldn't underage alcoholic drinks be more of a discretionary/ luxury item?

Peach goon and passion pop got me through high school parties and first year uni. So I have no idea how these kids can afford this crap.

I'd much prefer a tax on baby bonus type parents, who have dumb rich teenage girls with 3 mobile phones and the like. But the reality of the situation is, and the stupidity of Australians is such that any real action is simply not going to happen. So price rises for Roland Rockachelli drinks will go up.

Just get the rich teenage girls back on eccies, like in the late 90s, and cut this crap out.

P.S. - I think most people would be happy with a 6% increase in demand from China, or a 6% increase in earnings for a company above expectation. I don't think you would ever see such a massive price rise in real men's drinks anyway. Because adults who drink adult's drinks, vote.

 

[2020hindsight]

maybe the way you get a "scratch" or small dent on a car's bumper, and "the system" expects you to spend a fortune getting it panel beaten out.

(and/or draw on your insurance - which drives up premiums for all etc)

What the hell are bumpers for anyways?

Why do we lock ourselves into a system where a car has to look like a perfectly metallic-coat-painted piece of jewellery? I mean, was similar trouble taken over the safety? - like the buckling strength etc?

I know someone who bought a car with a mass of hail damage - (obviously big discount) - he simply left it like that!
He explained to curious enquirers that he had heard that dimples were good for the aerodynamics of a golfball - and he was trying it out on a car!

 

[Sprinter79]

Wow, I started a bit of a storm huh!

I'm comfortable with my research, and apparently, so was my lecturer, who gave me 99% for that effort I only lost a mark 'cause I left a full stop off one of my references, bloody typo nazis!

As I said earlier, there is no better way than increasing the price to reduce consumption. Simple economics isn't it?

 

[doctorj]

As I said earlier, there is no better way than increasing the price to reduce consumption. Simple economics isn't it?

Happy to take your word for it - but whether or not there is a better way isn't the issue at all (and its not something anyone's attempted to debate).

The issue is whether or not the large cost of increasing the cost of alcohol is worth the small benefit you're likely to get from it.

Research indicates it takes a VERY LARGE increase in the cost to achieve a VERY SMALL decrease in consumption.

 

[Julia]

Anyway, wouldn't underage alcoholic drinks be more of a discretionary/ luxury item?

No. The age group appears to have plenty of discretionary funds.

I'd much prefer a tax on baby bonus type parents, who have dumb rich teenage girls with 3 mobile phones and the like.

As you have just observed: if they can afford 3 mobile phones (which they don't appear to use sparingly), then of course they can afford increased cost of their alcohol of choice.

 

[Julia]

ht.
3. The grocer's apostrophe. I saw a great one the other day at my local butchershop. Leg's of lamb 17.90/kg. I kid you not.

Oh yes, indeed. Banana's for sale.
Or in real estate advertising: "Just a short stroll to local cafe's".
Grrrr!

 

[Sprinter79]

Well, the fewer people consuming a deadly drug, the better for the economy, with less spent on health care to treat those with preventable diseases and illnesses. The load on the public health system due to alcohol and tobacco is massive, and if an increase in tax for certain products reduces this load, well, I welcome it.

 

[chops_a_must]

Research indicates it takes a VERY LARGE increase in the cost to achieve a VERY SMALL decrease in consumption.

Research also indicates it's the most effective way of reducing consumption. Plus it doesn't cost the government anything.

Love how economists can't get out of their little hole.

All these charts and crap are great until confronted with an actual circumstance that requires just a smidgen of lateral thinking.

PP: Economists with no ability to draw on anything outside of their little arena.

 

[chops_a_must]

No. The age group appears to have plenty of discretionary funds.

Yes, but it's discretionary whether their parents give them the money or not. :

As you have just observed: if they can afford 3 mobile phones (which they don't appear to use sparingly), then of course they can afford increased cost of their alcohol of choice.

I think you know I was being facetious there Julia. :

But like I said, get these rich girls back onto eccies again, and all this will go away...

 

[doctorj]

Research also indicates it's the most effective way of reducing consumption.

The problem isn't consumption.

The problem is excess consumption.

How do we get those in our community that lack the necessary self restraint to moderate their consumption without placing undue burden on those that are capable of looking after themselves?

The government doesn't need (nor should it try) to manage the consumption of the majority that do so responsibly.

Clearly this is where tax fails. The failure of economists is not in saying that something won't work (they're right, it won't), it's that they don't come up with alternatives.

Those that jump up and down and say economists lack lateral thinking clearly lack the ability at a robust arguement that considers any solutions beyond what the mass media drums out.

 

[prawn_86]

On a similar topic to the good DoctorJ a PP which came about by watching Insight tonight:

Politicians who "assess alternatives" or "weigh up options" for years on end without actually doing anything.

Politicians who dodge questions

PP = POLITICIANS

 

[reece55]

Can I just remind everyone who actually think this tax on booze is a good thing:

THEY ARE MAKING OUR BEER MORE EXPENSIVE...

Forget about the stats, next time you buy a six pack to have at home responsibly, you are paying more because someone's parents can't be bothered supervising their kids because they are too busy with their own lives. Does this seem in the least bit fair?

Cheers :drink:

 

[chops_a_must]

The problem isn't consumption.

The problem is excess consumption.

How do we get those in our community that lack the necessary self restraint to moderate their consumption without placing undue burden on those that are capable of looking after themselves?

The government doesn't need (nor should it try) to manage the consumption of the majority that do so responsibly.

Clearly this is where tax fails. The failure of economists is not in saying that something won't work (they're right, it won't), it's that they don't come up with alternatives.

Those that jump up and down and say economists lack lateral thinking clearly lack the ability at a robust arguement that considers any solutions beyond what the mass media drums out.

Well, the same could be said for illicit drugs, speeding, any other issue you want to mention. It's never the ones keeping control in anything that are the problem

But great work attempting to shift the goal posts.

Clearly robust argument there. :

For mine, the problem isn't excess consumption, the issue is teenagers never having anything to do. For those that don't play sport, what is there to do as a teenager that doesn't cost you much money on the weekend? Probably nothing. You can't even go to the suburban speedways anymore, they've all gone. And anything that's worth doing as a teen costs 30-40 bucks. You can get absolutely trashed for half that. So, it's an easy choice.

Give teens something to do, and they wont drink as much. Simple.

 

[reece55]

Give teens something to do, and they wont drink as much. Simple.

Agreed.....

Now please explain how increasing tax achieves this outcome? The fact is it won't.......

My other point, how many kids do you know drink a glass of red? Still getting taxed....

Cheers

 

[doctorj]

Give teens something to do, and they wont drink as much. Simple.

Same could be said for people in general. Perth is so boring!