Death and prices: The political economy of Russia’s alcohol crisis Most experts agree that alcohol abuse has been a major cause of Russia’s soaring mortality rate. But why have ever more Russians been drinking themselves to death? Some attribute this to despair in the face of painful economic change. I present evidence that, in fact, the surge in alcohol-related deaths—and premature deaths in general— was fueled by a dramatic fall in the real price of vodka, which dropped 77 percent between December 1990 and December 1994. Variation in vodka prices—both over time and across Russia’s regions—closely matches variation in mortality. Although market competition and weak excise collection help explain the fall in prices, the main reason appears to be populist price regulation during inflationary periods. Daniel Treisman University of California, Los Angeles Department of Political Science University of California, Los Angeles 4289 Bunche Hall Los Angeles, CA 90095-1472
[email protected] August 2009 I10, I18, P36, P35 Keywords: alcohol, Russia, mortality, price regulation 1 Introduction During the last 20 years, Russia’s mortality rate has risen dramatically. In 1990, 11.2 of every thousand Russians died; by 2005, this had risen to 16.1 per thousand.1 Experts agree that alcohol abuse is among the most important causes.2 The increase in the death rate was accompanied by rapid growth in vodka sales and an upsurge of alcohol-related health problems. What is less clear is why such abuse should have risen so much during these years. Why—to put it bluntly—have growing numbers of Russians been drinking themselves to death? The recent mortality spike coincided with the introduction of painful economic reforms and many have suggested a connection.