There are times when I hear people say something on the radio, something I think they've actually thought about, but that I think is just wrong or unproven that I start pondering what they've said and never hear another word they have to say.
That happened to me this morning when I heard Dr. Joe Barry on Morning Ireland talking about the HSE's proposal that excise duties on alcohol be raised by 10%. Dr. Barry's argument was that this rise in price would cut alcohol consumption because, he said, alcohol had a high price elasticity. Then a minute or two later he argued that raising the price would increase the amount the government takes in.
Well, how does he know? If the elasticity of price is as he says then it's entirely possible that a tax hike on alcohol would cause consumption to fall sufficiently so that the government would find that its take on alcohol could actually fall. I don't know what might happen, but I do know he contradicted himself.
Maybe he had a point. Maybe duty on alcohol should be raised, but all I could think about after 90 seconds of his interview was that he could easily be wrong that the tax take would increase. Point lost with me due to misuse of economics.
