Can government enforced laws change a way of life?
The Russian government is trying (in vain) to change a CULTURE by enforcing a minimum price for liquor. It does this out of concern for its citizen’s health, however, the only thing it’s accomplished is angering the very people it is trying to help.
The Russian culture is cemented on celebration and traditions – especially during the holidays. Doubling liquor prices won’t change the conventions of the majority. Similarly, the rise in gas prices didn’t prompted the majority of truck-owners to switch to more fuel efficient vehicles (http://www.td.com/document/PDF/economics/special/dc0512_fuel_efficiency.pdf).
An Economic Perspective:
Liquor – like gasoline – has an inelastic demand curve. This means that even a large increase in prices yields only a small decrease in quantity demanded. Why? Because to Russians, liquor is a staple, a must-have with no substitutes available.
Even as prices rise from P2 to P1, quantity demanded drops relatively less, from Q2 to Q1.
Does it not make more sense tackle the root of the problem? To invest time and energy into changing an education system? To educate youth about the dangers of alcoholism is to build a new foundation for future generations – future generations that value culture but also understand the importance of physical wellbeing.
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