Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Wednesday, June 15, 2005

Price Floors on Booze in Prince Edward Island

The PEI [Prince Edward Island] Liquor Control Commission has introduced minimum prices for alcoholic beverages in an attempt to cut down on binge drinking at bars.

A recent price war among some Charlottetown bar owners had resulted in beer and shots of hard liquor going for as little as $2. At one point, some were selling a shot of liquor for $1.

The result of the price war was, surprise! that some people were binge drinking in bars. To solve this binge-drinking problem [there was no indication that anyone presented any evidence that it was more of a problem],

The commission has introduced minimum prices of $2.85 for a beer and $2.35 for a shot.
I am willing to bet a $1 beer that the bars were strong supporters of this policy. Surely the PEI Liquor Control Commission could have obtained the same result by raising taxes on alcoholic beverages. The way they did it, though, increases the business values of existing bars and liquor licenses.
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