Manon's Econ Blog

Externalities: Boredom fuels teen alcohol use

Posted on: February 17, 2010

When teenagers are bored and alcohol is cheap, people choose to drink in order to fight the boredom. They use alcohol as a form of entertainment, as would be going to the movie theater or shopping. The major problem with teens drinking is not only that they may develop an addiction to alcohol, but also that they may not know how to control themselves while drunk. They may provoke disturbances, noise, accidents… also called negative externalities.

Because there are negative externalities in teens drinking, the Marginal Private Benefit (MPB – teens benefit) and the Marginal Social Benefit (MSB – benefit to society) are different. The MSB is lower than the MPB because although teenagers may enjoy and have fun while drinking, the society (for example the people around) are not enjoying it as much (because of negative externalities like public disturbances or noise). The actual value of alcohol is PQ, but its real value is P*Q*. The difference between the actual value and the real value is the welfare loss (how much society looses because of these negative externalities).

It is the government’s duty to keep the value of alcohol as close to its real value as possible in order for the society to lose less. Advertisement may be a good idea to do this; for example teenagers are told that “If young people are drinking they should eat something beforehand, space their alcoholic drinks with water or soft drinks, look after their mates and, if they’re out, plan how they’re going to get home.” You cannot stop teenagers from being bored and from drinking, but you can teach them to drink in the safest conditions as possible to reduce the welfare loss.

BBC News article

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1 Response to "Externalities: Boredom fuels teen alcohol use"

Manon, and excellent analysis with an effective diagram to illustrate your ideas. Do you think advertising will be effective? How could you do what you suggest?

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