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Blog Post #2 (Russia’s vodka drinkers get New Year headache)

Russia’s vodka drinkers get New Year headache

Summary

Minimum prices for vodka took effect in Russia on Friday as part of President Dmitry Medvedev’s campaign to combat alcoholism at a time when Russians traditionally drink heavily during the New Year and Orthodox Christmas holidays.

The price of the cheapest half-litre vodka bottle will nearly double to a new minimum of 89 roubles ($2.95 U.S.)

Analysis

The price of vodka was raised because governments are trying to reduce the demand for it. Alcohol is usually considered as a normal good that as the price increases, the number of consumers willing and able to purchase decreases. But for countries such as Russia where Vodka is more towards a “necessity”, there’s more demand for it. As the price of Vodka increases, most people tend to continue its purchase, while feeling negative towards the government for this “unnecessary action”, which may lead to depression, resistance, etc.

Another effective way to reduce the demand for Vodka would be increasing the health awareness of possible harms from drinking alcohol. Or the government can introduce policies to limit the quantity of Vodka that consumers are allowed to purchase. These solutions are more effective because it may change the consumers’ habits of drinking with a lower chance of the public’s resistances.

 

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