The problem of social cost studies

Matt Burgess presented some of our work on social cost studies at the NZAE meetings. His presentation is embedded below, but it doesn't scale down well to blogger size, so you might do better by just hitting the link.


Prezi seems a pretty slick way of handling presentations; I'll have to remember it in future. Hit the forward triangle to advance the view. A few references as you work through it:

• On healthists vs economists: Public Health and the New Paternalism
• BERL's study of the social costs of harmful alcohol use:
  
  • Our initial report
  • Their reply
  • Our rejoinder.
  • Further explication of our minimal rationality assumption: we only require that, on average across all drinkers in the group, excess costs of "irrational" or mistaken consumption roughly match consumer surplus from the rational consumption.
  • Seamus also raised an important methodological point: there is no useful comparison between aggregate tax take and social costs where social costs include costs imposed by the drinker on himself.
• BERL's drug harm index
• The PWC study on the benefits of adult and continuing education
• On the problems when government funds studies to lobby itself

Matt correctly concluded that current processes don't protect policy against this kind of behaviour. Reputational mechanisms are very weak because while a consultancy's shonky report may disgrace it among academics and other consultants, the target audience - voters - is oblivious and journalists are not equipped to critically assess these produced reports. So even a shonky firm can get a new contract from a government department that wants a big number. Standard peer review doesn't work because the client, often Ministry of Health, doesn't want a sound number: it wants a politically convenient number. So it'll appoint peer reviewers that will provide its desired level of critique. And, the probability of a thorough external fisking is very slim; Matt and I did it, unpaid, because we were really annoyed that BERL was happy to let its number be compared against the aggregate tax take for purposes of policy discussion - we're masochists.

Matt consequently proposed that the NZAE work as a broker for peer review of consultants' reports. For a fee, the NZAE would assign a paid expert referee who would provide a proper independent review. A Ministry could signal that it wanted a credible number by insisting that such independent review be done. This is probably a more useful suggestion than my alternative: the awarding of an annual prize - the Shonky Award - for the worst piece of economic consulting work produced in that year.

A colleague who attended the session reports that another in attendance said BERL / MoH didn't put much weight on our critique because we were paid by industry. I WISH. I would have no problem at all in being funded to do this kind of work, so long as there were no strings on editorial freedom. But the sum total of anything that could possibly be in any way seen as compensation for our work on the BERL report was that I was invited to give a talk at last year's Beervana conference; when Susan and Ira came along, their flights and the hotel room upgrade / extra night were on my dime. I had to pay for my own ticket for the beer tasting, but didn't have to pay to attend the conference dinner (again, common for plenary speakers). In fact, I had a minor argument with the alcohol folks on the upgrade because the hotel seemed to have charged both us and them for it and the Brewer's Guild wanted reimbursement. Being flown to Wellington to present work at a conference hardly counts as compensation: it's kinda standard drill in academia that somebody who wants to hear you present flies you out there and puts you up. Here's the full list of who's been paid what:

• BERL: $135,000 for its initial report
• Our critique: nothing
• Brian Easton: $7,000 for his independent and impartial (but non-tendered) review of the differences between BERL and Crampton/Burgess
• BERL: we have an OIA request in on whether they were funded for their critique of our report; tomorrow's MoH's due date. Update: MoH says they didn't pay.
• Our rejoinder to BERL: nothing
• Our submission to the Law Commission: nothing
• Marsden Jacob and Associates: $60,000 for their untendered shockingly incompetent review.
• Our rejoinder to MJA: nothing

We're chumps. Every time we critique the healthists, the healthists pay themselves more to reply. Perhaps Marsden Jacob will yet be paid to fix their errors. There's absolutely nothing wrong with being paid to do work. But beware the one-sided skepticism.

OIA and the Marsden Jacob Report

Some results of a couple of OIA requests.

On 23 September 2009, Marsden Jacob produced a short proposal for the Law Commission outlining the work it could do as part of a "Scoping Study of Optimal Taxation of Alcohol in New Zealand." The Law Commission's "tight timeframe ... precluded a competitive tendering process. ... MJA was invited by the Commission to undertake the work as it has experience in alcohol policy and other social policy issues including gambling and the role of pricing in delivering health outcomes."

Now, if you run a Google Search, you'll find Marsden Jacob Associates. Don't hit the third link on the front page: that's my prior post noting that, with respect to its review of the literature, Marsden Jacob and Associates either is incompetent at basic reading comprehension, or deliberately promulgates lies. I'd guess they're well pleased that that particular line is what's excerpted in the Google search and shows up third on the front page. But scrolling on over to their list of professed expertise on their site, you don't see alcohol anywhere listed. Hitting "alcohol" in their search box: again, nothing listed. But they have been active in the anti-alcohol campaign. Dr. Marsden presented a paper at an anti-alcohol conference also attended by Sir Geoffrey Palmer in August 2009; perhaps that's when Palmer decided they'd be best suited to produce his no-compete, non-tendered report. But, Marsden Jacob has written at least one prior alcohol report, here. Perhaps that plus a friendly chat at an anti-alcohol conference is sufficient for a no-compete contract.

The work proposed, at proposed cost of $28,800 for twelve days' work, would have been "presented in succinct, polished written drafts, but would not be intended, at this preliminary stage, for wider distribution." Dr. John Marsden's letter to the Law Commission continues:

As discussed, a study for wider distribution would require considerably more work to make it able to withstand the anticipated antagonistic and heavily resourced response.

Well, they got the "antagonistic" right.

The limited scoping study included billing for two days of literature review, to be undertaken by Gene Tunny, Senior Economist at Marsden Jacob. And so now I know who was primarily responsible for the literature review.

Sir Geoffrey Palmer's reply of 29 September notes:

I realize that a 'wider distribution' of your study may necessitate a higher degree of quality assurance, and would be comfortable considering an increase in your proposed fees to cover the additional days required for ensuring the work meets your standard for inclusion in our final published report.

Marsden Jacob received the proposed increases - for a total of $60,000 - with the final product to be delivered mid-November. But it certainly didn't take any kind of heavily resourced response to find rather serious problems in their work. Rather, a very cursory reading of their report would have been sufficient for anyone familiar with the ongoing debates here.

I subsequently corresponded with John Whitehead at Treasury, who indicated that Treasury had recommended that the report be subject to independent quality assurance.

I today received an OIA response from Brigid Corcoran at the Law Commission stating that:

Sir Geoffrey asked the Secretary of the Treasury to examine the Marsden Jacob Associates (MJA) report. The Secretary's response to this request is included in the Commission's final report along with the MJA report, as Appendix 1. The Treasury advised that 'some form of independent quality assurance would be prudent' in relation to the reliance in the MJA report on the policy-analytical framework developed at the University of Sheffield. However, the timeframe for the publication of our final report precluded the Commission taking action on this advice. Rather, we included the Secretary's letter along with the MJA report in the Appendix in order to ensure the Government was aware of Treasury's view in relation to this particular aspect of the MJA analysis. It will be up to the Government to commission a review of the MJA analysis should it choose to do so.

Recall the timeline. Law Commission gets the report mid-November and publishes its report end-April. Treasury replies 2 February. And there was no time for an independent review? It took me all of a couple of hours to note that they'd completely screwed up. The first time I saw the report was on its publication; basic professional courtesy suggests providing advance copy. Heck, basic professional prudence recommends it: who better to point out if you've completely screwed something up than the guy being attacked? The best summary of the Marsden Jacob report, with respect to its review of the literature, remains "Marsden Jacob and Associates either is incompetent at basic reading comprehension, or deliberately promulgates lies".

It's also interesting that Palmer has so frequently chosen to cite the Marsden Jacob numbers despite Treasury's noting that the report needed independent quality assurance. Perhaps Treasury should be a little less veiled in its critiques. At some point, Treasury is going to have to start being a little bolder.

Again quoting Birgid Corcoran, this time in her letter of 11 May to Roger Kerr (who sent in one of the OIA requests here noted):

The work proceeded on the basis of Sir Geoffrey's letter and the final MJA report met the Commission's requirement that it be completed to a 'publishable' standard.

An undergraduate student turning in a paper that so severely mischaracterised its sources would receive a stern lecture from me at minimum, but apparently the standards in a Canterbury undergraduate economics course are higher than the Law Commission's standard for work meant to influence policy. Interesting.

If anyone's particularly keen on seeing the whole thing, I've uploaded it to Scribd, here; I've also blockquoted above the entire response I received from Ms. Corcoran regarding independent review of the report.

The quality of policy advice in New Zealand is abysmal.

Marsden Jacob review - continued

In the last post, I noted some problems with the Marsden Jacob review. Most annoyingly, from a personal perspective, they strongly critique the Crampton and Burgess work on two points that severely mischaracterise our work. Contra Marsden:

• In actuality, none of our results depend on the cardioprotective effects of alcohol for serious drinkers;
• their critique of our narrow focus highlights a small robustness check at the end of our work rather than the vast bulk of what we actually did - they take the robustness check as constituting the entire method rather than cursory treatment of an alternate method.

They then argue at paragraph 58 that we take a flawed conception of cost internalisation. Because some costs of drinkers' behaviour is borne by others, including friends, families and government, drinkers drink more than they would were they to bear the full costs. We did note the costs to government as a cost of harmful drinking, including costs to the public health system and policing costs. Since they seem to believe that our method discounted all fiscal externalities, presumably they missed that part.

On cost shifting to family and friends, I can't help but wonder whether their argument proves too much: all kinds of consumption decisions we make have effects on friends and family. I may spend too many late nights reading shonky alcohol policy reports and be grumbly the next day; if I had to bear all of the costs thereby imposed on my family, I might do less of that. But, of course, families have ways of internalising those effects: my wife rightly ensures as much. Marsden Jacob here are effectively launching a full assault on notions of consumer sovereignty: if we can't rely on intrafamily mechanisms for solving these problems, then there exists no consumption decision that isn't subject to their critique. This may well be a good argument to have in an economics journal as a critique of existing orthodoxy, but it has no place in a commissioned report that ought to be providing a mainstream economic approach.

This isn't the first time though that Marsden Jacob use their commissioned policy report to challenge the standing orthodoxy though. In their critique of the positive health effects of drinking, they give full weight to a few critiques of the "previously near unanimous orthodoxy" rather than to that orthodoxy. Again, sound technique would have had them accepting the best consensus of the literature in which they are not expert rather than the overblown critiques of a few anti-alcohol folks.

Let's now move on to the rest of the report.

They argue that the deadweight costs of alcohol taxation are 3% or less for a 50% increase in alcohol taxes. Since alcohol demand is fairly inelastic, the Harberger triangle is relatively small. They then invoke the inverse-elasticity rule. But as Seamus noted here and I noted here, the inverse-elasticity rule isn't as simple as the undergraduate version makes out. If supply is not perfectly elastic, then we need also consider reductions in producer surplus, not just consumer surplus. If there are cross-price effects between taxed goods - if inelastically demanded alcohol is a strong complement to elastically demanded restaurant meals, for example, then Ramsey doesn't reduce to inverse-elasticity. And, if taxed goods and leisure have cross-price effects, then we get the Corlett and Hague result. Higher alcohol excise tax doesn't flow automatically from Ramsey considerations. Neither does it necessarily flow from the inverse-elasticity rule: the McLeod report having argued that existing (lower) levels of excise taxation could not be justified on Ramsey grounds.

I'll leave it to Seamus to come in later with more comprehensive discussion of Ramsey taxation.

But, whatever efficiency claims - debatable though they may be - might be made for moving increasing alcohol taxes and reducing marginal income tax rates disappear when those alcohol tax revenues are instead earmarked for anti-alcohol advocacy groups like ALAC. It's consequently disingenuous at best, or blindingly stupid at worst, for Palmer to cite Marsden Jacob's numbers on efficiency gains while simultaneously advocating that some of the raised tax revenue be earmarked for anti-alcohol programmes. To re-iterate: the efficiency claims rely entirely on the consumer surplus that's turned into tax revenue either being rebated to consumers directly or being used to offset other taxes that impose higher deadweight costs. Palmer simply can't pair the efficiency claims with a call for some of those revenues to be earmarked.

Marsden Jacob is entirely correct however that proper Pigovean analysis seeks to equate the private marginal cost of consumption with the social marginal cost of consumption rather than equating total tax revenue with total external cost. To my mind, if total tax revenue roughly approximates total external cost, then things probably aren't far out of whack as a first cut. Their approach in simulation work from page 34 onwards requires that all excise taxes raised are rebated to consumers. Ideally, all collected alcohol tax revenues would be lump-sum rebated to all drinkers. Such a scheme could have pretty desirable characteristics: it effectively would induce progressivity into the alcohol tax schedule. Heavy drinkers would pay net taxes; moderate drinkers would receive net subsidy. The linearity of existing taxes is a pretty big problem: moderate drinkers are overtaxed while heavy drinkers are undertaxed relative to external cost imposed. The tax plus lump sum rebate to every drinker mechanism, noted at paragraph 64, is a pretty neat idea. I'd go so far as to say I could be convinced to endorse it if I believed that all raised revenue would be so rebated and wouldn't just wind up being earmarked for anti-alcohol advocacy. Of course, I'd only endorse it to the extent that the taxes reflected actual external harms rather than things like lost wages that are largely internalised: they're already part of private marginal cost, so putting a Pigovean tax on that part is double counting.

If on the other hand raised revenues just go into the general pool - or, worse, to projects like anti-alcohol advocacy that many drinkers find positively offensive - the MJ results hold only if the consumer derives the same enjoyment from a dollar's worth of tax-paying as he does from a dollar's worth of alcohol. That seems unlikely.

I continue to confess unfamiliarity with the Sheffield simulation approach here used. But I wonder about some of those results. I've not seen any good evidence that young drinkers are more responsive to prices than adults: the price elasticity of demand for young drinkers is not different from that of adults. Grossman, Chaloupka et al, 1998 Economic Inquiry, put it at -0.41: basically the same as for adults. And, we have good evidence that heavy drinkers' consumption is far less elastic than moderate drinkers' consumption. The simulation results show strongest effect of tax on young drinkers; they note at paragraph 95 that Sheffield estimates higher price elasticity for harmful and hazardous drinkers. Both of those make me more than a bit worried about using the Sheffield results.

Honestly, I'm a bit confused here. At paragraph 95 they claim Sheffield finds higher price elasticity for harmful and hazardous drinkers; at paragraph 82, they assume a uniform price elasticity of demand for all drinkers "for consistency with the University of Sheffield study". But, they're at best assuming uniform elasticity; at worst, they're assuming heavy drinkers are more price elastic. Neither one sits well with the best empirical results that heavy drinkers are far less elastic than moderate drinkers.

Everything following in paragraph 96 assumes at best uniform price elasticities for moderate and heavy drinkers; at worst, that heavy drinkers are more price responsive. They also note their results may be sensitive to those assumptions. Writes MJ at paragraph 96.v:

Unless the price elasticities of demand for alcohol for heavy drinkers are substantially lower than for other drinkers, the higher price increases for heavy drinkers means that harmful and excessive (and likely) younger drinkers will face the largest reductions in consumption and therefore the biggest changes in harms to themselves – and to other parties.

Ok. So they have some results that depend on an assumption of at least equal elasticity and that, they admit, are sensitive to whether there are large differences in price elasticity of demand. The best numbers I've seen show youth drinkers' elasticity on par with averages, and heavy drinkers much less elastic (-0.28 vs -0.44). The Law Commission repeats those numbers throughout their report as well, so I'm not going out on a limb in relying on them.

At Paragraph 97, MJ cites the Sheffield results as strongly diminishing the risk highlighted in the Burgess Crampton submission to the Law Commission that "moderate drinkers respond to price increases by more than heavy drinkers." They quote us from our submission, then say:

Indeed, for England and Wales and for Scotland, the policy simulation models suggest exactly the opposite.

I can only laugh and shake my head at this point. In our submission, we were citing evidence that elasticity varies greatly between moderate and heavy drinkers (with heavy drinkers being far less elastic); their evidence against that is a policy simulation that assumes there to be no difference in demand elasticity between moderate and heavy drinkers and possibly assumes heavy drinkers to be more elastic!

And, if they had access to our submission to the Law Commission, they would have seen our extensive discussion there of how our results do not hinge on a narrow conception of rationality. Pages 7-9 discuss that in depth. But MJ simply asserts that our results are sensitive to assumptions about rationality. Again, I'd be happy for them to provide some reasoned argument about how our results were sensitive in a way we hadn't considered. I'd thought yesterday that they'd simply not seen our extensive discussions on the blog and in our submission to the Law Commission on rationality. But they're here citing that submission.

In summary: the only substantive result from the Marsden Jacob commissioned analysis is that an excise tax increase on an inelastic good, if the tax revenue is rebated to drinkers lump sum or offsets more distortionary forms of taxation, may be desirable. Even that result is questionable absent more explicit consideration of cross-price elasticities between alcohol and other consumption goods, and between alcohol and untaxed leisure. Moreover, the McLeod Report specifically rejected alcohol excise tax increases on Ramsey grounds.

Fortunately, Simon Power appears to have entirely rejected alcohol excise tax increases. iPredict's still giving a 16% chance of a 10% or more increase in the excise tax, but no real chance of anything higher.

Marsden Jacob on alcohol

The Law Commission commissioned Aussie consultants Marsden Jacobs to weigh in on the costs and benefits of alcohol. Marsden Jacobs previously issued this report which cited approvingly the Collins and Lapsley measures of the social harm of alcohol (including the amount that drinkers spend on their own booze as a social harm) and which dismissed reduced alcohol consumption in Australia and other countries post liberalisation by noting that, absent liberalisation, the reduction could have been even greater. But I suppose they're a step up from Brian Easton.

Some initial thoughts on the Marsden Jacob (available here and here) report:

• The Marsden Jacobs report fundamentally mischaracterises our approach to rationality, following Easton in arguing that we require strong rationality assumptions. We don't. All we need is that the harms of irrational excess consumption on the latter portion of a harmful drinker's consumption, taken on average across all drinkers categorized as harmful, roughly balance the surplus they enjoy from the earlier portions of their consumption. Heck, MJ's graph at p. 18, figure 7, basically replicates the graph we have at the link above, except representing irrationality as shifting the marginal benefits curve inwards rather than the marginal costs curve outwards. Either one works.
  
  We noted that BERL was too quick to assume irrationality, but nothing we did required strong rationality. If you wanted to restrict the set of harmful drinkers to being only those for whom the total costs of consumption are higher than the total benefits, that would be different. But when the range of harmful drinkers is set so broadly as to include folks who occasionally have three or more pints, we really have to take seriously the consumption benefits that these folks get.
• MJ then go on to conflate economically irrational consumption with epidemiologically harmful consumption. This is a serious error on their part. It's not crazy to count internalities where there are demonstrated irrationality issues. I don't like it much, and I'd argue against it, but it's not crazy. But taking consumption beyond an epidemiological threshold as prima facie evidence of irrationality is crazy. They move directly from the non-crazy "if people are irrational, they may well consume in excess of where they'd consume if they were rational; if irrational, some apparent consumer surplus needs adjusting downwards" to this:

  The above discussion highlights that, to assess the impact of policy measures, such as an increase in the rate of excise, it is important to know the proportion of total alcohol consumption that can be considered to involve high lifetime or high short-term risk. This is especially important when exploring and quantifying the implications of value judgements that allow for irrationality in consumption decisions on alcohol when intoxicated or over the longer term.

  For MJ, consumption beyond an epidemiological norm is irrational. Interesting value judgement. I wonder whether Palmer had a good idea about their particular values when he hired them.
• MJ seriously and uncharitably misreads our report at paragraphs 55 & 56. At page 31 of our report, we noted that our measure of external costs also included some external costs that would be taken as pecuniary rather than technological were we to take the Buchanan and Stubblebine approach to delineating the two. All of our numbers provided the figure that included matters Buchanan and Stubblebine would have taken as being pecuniary, like costs to the public health system. We noted that revising things to remove all pecuniary externalities, both positive and negative, would have had little effect on overall results because we'd also then be knocking out tax revenues as being only a transfer. Net costs would be little changed.
  
  MJ then characterizes us as arguing strongly in favour of the lower "technological externalities only" position and only begrudgingly conceding the possibility that others might consider also the fiscal externalities that Buchanan and Stubblebine labeled pecuniary; they say this is out of line with Treasury and the Business Roundtable's prior work.

  Thus, Crampton and Burgess exclude from consideration lost output, alcohol production costs, costs of crime prevention, health care costs, most road crash costs and excise taxes collected.

  This is a serious mischaracterization of our work. At Table 2, we tallied costs of lost output due to harmful alcohol use: $173 million less consumption resources saved of $299.7 million. We did indeed deem alcohol production costs to be fully internalized: people do buy their own alcohol without subsidy. Costs of crime preventative expenditure we tallied as $24.7 million at Table 3. Section 4.5 lists external health care costs of $254.8 million. We did discount most road crash costs to include only the costs on innocent bystanders: $33.2 million. Finally, we counted collected excise taxes against the total measure of external cost. It's only in the one-paragraph: "Oh, if you want to follow Buchanan and Stubblebine instead, it won't make much difference" that we wipe all of those costs and benefits aside.
  
  It's not like we made a big secret about this; it's all laid out very plainly in the report, we released a spreadsheet with all supporting calculations, and I've blogged extensively on it. Marsden Jacob and Associates either is incompetent at basic reading comprehension, or deliberately promulgates lies. It would have taken considerably less than a month for us to fisk the BERL report had we been able to dismiss all of those costs out of hand. Rather, we adjusted them so they made some kind of sense, then gave our best guess at the portion that fell externally.
• MJ's treatment of cost internalisation at paragraph 58 is interesting. They say our approach is flawed for assuming that drinkers internalize costs; they say rather that costs are imposed on family, friends and others.

  They do not bear the full costs because friends, families, partners and governments act to offset these costs. A rational fully informed drinker would recognise and anticipate this support when making his consumption decisions. If the subsidy from the welfare system and/or from the support of other individuals were removed, the individual would make different choices. This is a form of moral hazard since drinkers (even if perfectly informed of the costs and risks) know that they will not bear the full costs. The individual drinker does not count the cost of these subsidies since they are a benefit to him, but they are a cost elsewhere.

  Is there any consumption - cars, movies, anything at all - for which this would not be true? Do we say that the cost of McDonald's food is not internalized because people on welfare would buy less McDonald's food if they didn't get welfare payments? Do we reckon that Corvettes are horrible things because men in their late 40s buy them and impose those costs on their families? This is ludicrous.
• Next in the list of items headed Marsden Jacob and Associates either is incompetent at basic reading comprehension, or deliberately promulgates lies: paragraph 59, where they claim that our results rely too strongly on assumptions of strong cardioprotective effects of alcohol. Again, this either is a deliberate lie or they're incompetent. Here's what we did say in our report:

  As noted earlier, Corrao et al (2000) provide reasonable evidence of health benefits of alcohol consumption extending well beyond the hazardous threshold used by BERL; no health benefits are counted by BERL. Net health care costs of “harmful” alcohol use will consequently be rather lower than those cited by BERL. However, putting a value on this would require serious research beyond what we here are able to do.

  We specifically said that we think the health costs are an upper bound because of the beneficial effects of alcohol for cardioprotection even on heavy drinkers (note that the benefits for moderate drinkers are left to one side as well): we do not tally them ever in our figures. Nothing in our results rely on strong or even ANY cardioprotective effects at high consumption levels. MJ is starting more and more to look like a deliberate hit piece rather than a serious piece of analysis.
  
  In Box 3, they go on to argue against the health benefits of moderate drinking, which was entirely beside the point for tabulating costs and benefits of heavy drinking. But, they raise every canard that I blew up here. It's hopeless. It seems as though there's a result that they were paid to find, and they were sure to find it. It does discredit to the Law Commission that they commissioned and endorsed this work.
• Finally, they chide us for ignoring the work of the Sheffield team in cost simulation. I will happily confess to ignorance about that work. We were fisking a particular report on the costs of alcohol. If we'd been paid anywhere in the range that BERL were paid, or Marsden Jacob (oh, I'll look forward to getting that price by OIA), we might well have canvassed a bit more broadly.
• Marsden Jacobs argue that tax increases on alcohol can be efficient: they argue that while it's true that moderate drinkers are more price responsive, the Harberger Triangle is small relative to the tax take, and the tax take is better than just a transfer, it's an opportunity to offset less efficient taxes. Seamus previously warned us of the problems in taking an undergraduate understanding of Ramsey taxation to policy: it isn't absolute price elasticity that matters so much as cross-price elasticity with untaxed leisure. In any case, the Law Commission goes on to undermine whatever efficiency case there might be by arguing that at least some of the excise tax take should be earmarked for alcohol harm reduction. Treasury explicitly reminds LC of this in their note preceding the Marsden Jacobs report.
• MJ seriously downplay the health benefits of moderate drinking and make no attempt to estimate the reduction in those benefits with an increase in excise tax

Skimming ahead (haven't read the last third in any depth as yet), I see calls for scenario modelling of results where half to 80% of alcohol is irrationally consumed; I also see them arguing that the existence of alcohol advertising proves that consumer preferences are too malleable to be the basis for welfare:

the integrity of the concept [consumer surplus] can be questioned for several reasons including that the New Zealand alcohol industry believes it is profitable to spend substantially (more than $30 million a year) on alcohol advertising and promotions to shift consumer preferences;

Wow. Advertising means that consumer surplus is all wrong. Just wow. I need a drink.