The economic costs to New Zealand of lost production due to alcohol abuse

Abstract

This paper estimates the economic cost of lost production in New Zealand due to the abuse of alcohol. Four categories of lost production are examined including excess unemployment amongst abusers, decreased efficiency of abusers in the workforce, temporary withdrawal from the work force due to alcohol induced illness or accident, and permanent withdrawal from the work force due to the premature death of abusers. Assuming full employment, a 4.3% prevalence rate of alcohol abuse, and a 3 : 1 ratio of male to female abusers, the study presents estimates of costs for a range of possible abuser employment levels. The findings indicate that the cost of lost production due to alcohol abuse was between $582 million and $770 million for the 1981/82 financial year. This was equivalent to between 2% and 2.3% of GNP for that year.