Tuesday, 27 August 2019

I can't believe we're still talking about the dumb BERL number

The Ministry of Health says harm from alcohol is now costing New Zealand more than $7 billion every year. In fact, every Kiwi pays $1635 a year fixing up the problems from alcohol.

Investigations Reporter Michael Morrah visited the frontlines with Auckland Police in the first part of his 'Because it Matters' series.
The Ministry of Health might have been one of the co-commissioners of the BERL report, but it's not a Ministry of Health figure.

Last year, BERL updated their 2009 figure on the social costs of alcohol. I critiqued it over at Newsroom (ungated); while BERL then did not reply to my requests for the workings underlying the figure, it looked like an inflation and population update of their 2009 figure.

The number got a lot of press again a couple of weeks ago; Alcohol Action NZ was running their annual temperance meetings, and so everyone was lining up to cite the big number. This time, BERL confirmed for me that the figure is an update of the 2009 one - but rather than an inflation/population update, it's an update taking the social cost of alcohol as a constant fraction of GDP. So it's inflated by nominal GDP growth over the period.

I went through it all again in the Dom Post.
The past fortnight brought a lot of headline stories about the social cost of alcohol. Felix Desmarais' article for The Dominion Post warned that alcohol costs $5 billion. The New Zealand Herald's headline warned of a "$70b social cost", citing Alcohol Action New Zealand's rolling up 10 years' worth of alleged costs.

If you thought those numbers referred primarily to the costs of alcohol-related crime, or to alcohol-related health care costs, you shall be forgiven. Social cost figures should refer to some cost borne by people other than drinkers themselves – external costs, as economists tend to put it. But Berl's number really is not that.
The Dom switched BERL to Berl; I'm pretty sure it's an acronym requiring capitalisation. Oh well.

I was pretty surprised to see the BERL number resurrected last year. The number didn't go well for them in '09.

And since memories seem short these days:

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