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What is the economic impact of alcohol consumption in the US?

Written by Brandon Okey. Mina Draskovic, B.Psy., reviewed this content for accuracy.

Excessive drinking takes a heavy economic toll across the United States. According to the Centers for Disease Control and Prevention (CDC), the 2010 economic cost of alcohol abuse was $249 billion. 

Productivity losses and healthcare expenses account for 83% of the annual economic cost. While targeted policies offer the most effective means to alleviate financial stress, cost-benefit analyses consistently reveal that the costs of alcohol consumption outweigh any economic benefits.

A 2023 report from Harvard Medical School projected that the annual cost of treating alcohol-associated liver disease (ALD) alone would more than double over the next two decades, increasing from $31 billion in 2022 to $66 billion in 2040. 

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Alcohol addiction can spiral out of control, wreaking havoc on finances, health, relationships, and every other aspect of life. But with the right support, you can turn the page on struggling with drinking. 

Our Utah rehab center provides comprehensive treatment for alcohol addiction, including medically monitored detox, psychotherapy, group support, and aftercare planning. 

What is the economic cost of alcohol abuse on society?

We are all aware of the damage alcohol can inflict on our health. On a societal level, the medical, legal, and labor crisis fueled by substance abuse drains public budgets, slows economic growth, and burdens the economy of the United States.

Here’s why alcohol abuse is a heavy economic burden on the US economy: 

  1. The healthcare system is burdened by the widespread treatment of alcohol-induced health conditions and long-term complications. 
  2. Absenteeism and poor decision-making associated with drinking problems lead to reduced workforce productivity.
  3. The criminal justice system’s resources are strained from elevated alcohol-related crime rates.
  4. The expenses across social service programs correlated to growth in alcohol use disorders are rising.
  5. The violence fueled by alcoholic impairment leads to property damage from reckless behavior and driving accidents, which results in significant insurance costs.
  6. Government funds are allocated to enforce alcohol regulations and mitigate use.

One: healthcare system strain for treating alcohol-induced illnesses

Healthcare costs associated with treating alcohol-related illnesses and injuries are substantial. Risky drinkers tend to use more expensive services, such as hospitals and emergency rooms. According to a study published by JAMA Network, the annual medical costs attributable to alcohol-related disorders were $35 billion. 

This number includes the cost of treating alcohol-associated secondary conditions such as alcoholic liver disease, pancreatitis, alcoholic cardiomyopathy, and liver cancer. Binge drinking also has the so-called “ripple effect”, in which these secondary illnesses further strain healthcare resources and necessitate additional costly procedures and hospitalizations, while leading to potentially long-term conditions such as dementia, Wernicke-Korsakoff syndrome, and multiple organ failure.

When you do your part to moderate alcohol consumption—or better yet, abstain from drinking completely— it can go a long way toward easing the massive economic burden on the U.S. healthcare system. If you’re struggling to quit alcohol, our alcohol addiction treatment program is here to provide support and guidance.

Two: workforce productivity declines due to heavy drinking

Alcohol use disorder can significantly impact workplace productivity. Research suggests that alcohol use disorder is responsible for 232 million missed work days annually in the U.S. In 2010, out of the total $249 billion in economic burden, 72% of these costs resulted from losses in workplace productivity.

Heavy alcohol use can lead to impaired work performance, often referred to as presenteeism. Thørrisen, et. al. argue that, while an employee might be physically present at work, their productivity is reduced due to the effects of alcohol. This can manifest as decreased efficiency, mistakes, poor decision-making, and strained relationships with coworkers.

Three: burden on the criminal justice system’s resources 

Alcohol-related crimes in the U.S. are on the rise, which takes a substantial economic toll on the criminal justice system. According to a Gitnux report from 2023, American taxpayers shoulder approximately $94.2 billion annually in alcohol-related criminal justice expenses. 

Research shows that the cost of criminal justice expenses for alcohol-related DUI and DWI arrests and prosecutions was estimated to be $25 billion in 2022. This includes costs associated with law enforcement, court proceedings, public defense, and incarceration. Alcohol-related crimes range from minor offenses such as public disorder to serious crimes such as assault, homicide, and alcohol-related traffic accidents.

Four: welfare costs strain the social services system

Over 3 million Americans with alcohol use disorders rely on social and welfare services such as emergency shelters, transitional housing, disability benefits, and job placement yearly. A 2023 study published in Substance Abuse: Research and Treatment revealed that these rack up around $25 billion in associated costs. 

According to Morgenstern and Blanchard, 7.5% of Temporary Assistance for Needy Families (TANF) recipients display alcohol dependency. Alcohol abusers who meet eligibility requirements can also access Supplemental Nutrition Assistance Program (SNAP) benefits to aid with food costs. Targeted housing assistance programs provide transitional housing support to those recovering from addiction, though losing housing itself can trigger relapse.

While relapse doesn’t mean failure, a minor stumble can feel like falling flat on your face. Here at Ardu, we stand ready with open arms and compassionate care through every twist and turn, providing a customized relapse prevention program to help you reclaim lasting freedom and health. 

Five: property damage from alcohol-fueled accidents and violence

Alcohol impacts motor skills and judgment. Drunk driving wrecks and alcohol-induced assaults, batteries, and acts of vandalism lead to substantial property damage, resulting in expensive repairs and replacement costs. 

The National Highway Traffic Safety Administration (NHTSA) revealed that, in 2019, alcohol-involved crashes resulted in $68.9 billion in economic costs, accounting for 20% of all crash costs. Researchers from Curtin University found that “unit costs for crash survivors by severity are higher for impaired driving than for other crashes.” 

This destructive behavior stems from alcohol’s ability to alter brain functioning and lower inhibitions, leading to increased impulsiveness and risk-taking behavior. Learn what happens to your brain when you stop drinking.

Six: administrative costs of alcohol control policies

The administrative costs of alcohol control policies are a significant part of the economic toll alcohol misuse takes on the U.S. economy. These policies are essential for reducing excessive alcohol consumption and related issues, but they also represent a financial commitment from the government. Some of them entail:

  • Taxation of alcoholic beverages
  • Licensing and compliance monitoring of manufacturers, distributors, and retailers
  • Advertising restrictions
  • Regulation of outlet density
  • Legal drinking age laws

While these policies aim to curb harmful drinking trends, for the individual already suffering from alcoholism, the compassionate support of treatment centers such as Ardu Recovery Center can make all the difference in reclaiming health and economic stability.

We know it’s challenging to repair the damage inflicted by alcohol abuse, but Ardu Recovery Center is at your disposal. Our alcohol detox center offers individualized care to free yourself from the grip of alcohol addiction and heal.

What is the economic cost of alcohol abuse on individuals?

Alcohol abuse doesn’t just drain the economy on a national scale. When alcoholism takes hold, the financial costs felt by individuals and families are as heartbreaking as they are underestimated. Consider the economic impact of alcoholism as a ripple effect that extends from the personal finances of the individual suffering from AUD to the broader societal costs. 

From depleted savings to astronomical legal costs, those gripped by addiction often face looming threats of bankruptcy, homelessness, and unemployment without the right support.

Here are some ways in which alcoholism impacts an individual’s life economically.

  1. Money overspent on alcohol takes away from meeting basic needs.
  2. Alcohol-related health issues rack up hefty out-of-pocket medical bills.
  3. Drinking problems drive down earnings through poor job performance and attendance.
  4. Legal troubles from drinking bring heavy penalties and lawyer fees that strain personal finances.
  5. Out-of-control drinking can spark a downhill slide into debt, credit overreliance, and reliance on financial aid programs to stay afloat.

One: alcohol purchase costs

Alcohol abuse can lead to poor spending habits, impacting the finances of those who drink and their families. It can influence decision-making, leading to increased spending on alcohol and related expenses, which can contribute to financial difficulties.

Alcohol can quickly consume funds that could be used for meeting basic needs such as housing, food, transportation, or medical care. Results of a 2022 study indicate that lower-income populations proportionately spend more on alcohol than higher earners, taking away from vital spending on food, housing, education, and other key goods and services important for well-being.

Two: out-of-pocket alcohol-related medical expenses 

People with AUD often face higher annual per-person healthcare expenditures that can total thousands of dollars more than the average individual, due to increased hospitalizations and interventions for associated medical issues. 

For example, another study found that commercially insured people with alcohol-attributable diagnoses incur an additional $14,918 yearly, and $4,823 yearly for each Medicaid-insured individual for healthcare expenditures.

Three: income and wage loss due to heavy drinking

Alcoholism can lead to job loss, reduced work hours, and decreased earnings potential. Chronic drinkers may have to leave their careers early due to health problems, leading to a loss of work income and lower social security contributions. 

Mulia, et. al. found that “severe economic loss (job or housing loss) was positively associated with negative drinking consequences, alcohol dependence and (marginally) drunkenness.” 

Four: alcohol-related legal expenditures

When someone is caught up in alcohol-related legal issues, such as DUI or DWI cases, they often face hefty legal and court fees. The average cost of a DUI in California is between $10,000 and $12,000, according to the California Drivers Advocates. These expenditures can include higher insurance premiums, license reinstatement fees, attorney costs, court fines, and ignition interlock installation. 

Alcohol-related legal issues can directly strain the finances of individuals charged with alcohol-impaired driving, especially low-income offenders, potentially trapping them in cycles of debt and poverty.

Five: financial instability inflicted by alcoholism

Chronic drinkers can face serious financial instability such as increased debt, late fees, and higher interest rates. A 2023 study found “a possible link between indebtedness and a heightened risk of AUD.” 

A meta-analysis of 65 studies found that personal, unsecured debt was associated with 2.68 times higher odds of “problem drinking,” which was defined as heavy episodic drinking (HED), or the presence of AUD. Alcoholics may also face increased credit card charges to cover the gap between expenses and reduced income.

Lost productivity due to alcohol use and abuse may further deepen the financial strain due to missed days at work, job loss, and subsequent loss of income.

Clearly, alcohol abuse takes a tremendous financial toll, not only on society as a whole but also on the personal finances of those in its grip. If you or a loved one are struggling with alcohol, the caring professionals at Ardu Recovery Center are here to help get your finances and your life back on track.

What is the average alcohol consumption per day?

Average alcohol consumption per day in the United States is not typically measured on a daily basis, but rather on a weekly or annual basis. According to the National Institute on Alcohol Abuse and Alcoholism (NIAAA), the 2021 national per capita consumption level of ethanol was 2.51 gallons annually. 

To get a daily average, you would need to divide this annual figure by the number of days in a year. You also need to know that one gallon contains 128 fluid ounces, and a standard drink in the United States contains 0.6 fluid ounces of ethanol (don’t worry, we did all the math for you.) This means that, on average, the per capita alcohol consumption rate in the United States in 2021 was approximately 1.47 standard drinks per day. 

The CDC defines heavy alcohol drinking as having more than 14 drinks per week for men and more than 7 drinks per week for women. A 2022 Gallup poll revealed that about a third of drinkers reported having no alcoholic drinks in the past seven days, while about half said they had between one and seven drinks, and 12% reported consuming eight or more drinks.

How much does the average person spend on alcohol per month?

The average person’s spending on alcohol per month can vary quite a bit, depending on their drinking habits and the types of beverages they prefer. For example, if someone enjoys a few drinks a week at a local bar, their monthly spending could easily reach into the hundreds. On the other hand, someone who only has an occasional glass of wine at home might spend significantly less. 

Alcohol can be a significant expense, and it’s always a good idea to consider how these costs fit into your overall budget. In 2016, the average annual alcohol expenditure was $484, which breaks down to about $40 per month. According to the experts at Pro Morning Consult, U.S. adults ages 21 and over spent an average of $34 a month on alcohol in 2022.

It’s not just about the money—it’s also about enjoying responsibly and taking care of your health.

How much money is spent on alcohol each year in the world?

The global beverage alcohol market grew by 12% in 2021, reaching a staggering US$1.17 trillion. That’s a lot of clinking glasses around the world. A 2022 news report revealed that the economic costs of harm due to alcohol amount to over $1,300 annually for every adult, which translates to 2.6% of total GDP.

Don’t forget that while enjoying a drink can be a part of many people’s social lives, alcohol misuse can lead to serious health and social issues. NIAAA reports that alcohol misuse was the seventh-leading risk factor for premature death and disability in 2016.

To curb the immense global health burden of alcohol consumption, it’s necessary to curb hazardous drinking patterns. Alcohol abuse and alcoholism don’t only lead to drunken accidents or violence; they can systematically destroy the health and wellness of a population. 

If you’re already dependent on alcohol in some way shape or form, you may face some challenges on your journey to sobriety. Ardu is here to provide support every step of the way.

Contact Ardu Recovery Center

Rather than taking a one-size-fits-all approach, we at Ardu Recovery Center develop customized treatment plans tailored to your specific needs and goals. The first few weeks after quitting may be the hardest on your body and mental health, as alcohol withdrawal symptoms set in. 

Inpatient treatment at our residential facilities surrounds you with 24/7 support. Outpatient treatment programs, such as partial hospitalization and intensive outpatient programs, offer flexible solutions to maintain your home and work routines or receive treatment while in a sober living facility.

With psychotherapy and other modalities, you will learn healthy coping skills so you aren’t tempted to rely on alcoholic beverages. A variety of therapeutic approaches, including cognitive behavioral therapy, motivational interviewing, and dialectical behavioral therapy, allow you to find the modality that resonates with you.

We do everything in our power to help you find your way back to wellness. Our comprehensive recovery program can help restore that healthy, balanced way of life.

Brandon Okey

Brandon Okey is the co-founder of Ardu Recovery Center and is dedicated to empowering people on their journey to sobriety.

Economic impact of alcohol consumption FAQ

What is the economic burden of alcohol use and why is it problematic?

The economic costs of alcohol abuse are problematic because it costs hundreds of billions of dollars per year due to drained healthcare resources, reduced workplace productivity, strained legal and criminal justice systems, and perpetuated poverty and debt cycles. 

Studies estimate the total societal cost of excessive alcohol consumption in the U.S. at around $250 billion annually when combining healthcare expenditures, lost earnings and productivity, criminal justice implications, vehicle crashes, property damage, and more. This massive financial strain demonstrates why curbing excessive drinking on an individual and societal level can benefit economic health.

Is alcohol consumption a negative externality?

Alcohol consumption generates substantial negative externalities that spill over onto society rather than only affecting individual drinkers. A negative externality occurs when the consumption or production of a product hurts a third party. In the case of alcohol, the private consumer does not consider the effect that their excessive alcohol consumption has on society, leading to a welfare loss from the overconsumption and overvaluing of alcohol. 

This is reflected in many different externalities such as crime, violence, road traffic accidents, costs to the healthcare system, and lower economic productivity. According to a 2019 study, alcohol consumption is associated with non-linear negative externalities, and the costs imposed on others without their consent are not reflected in market outcomes. To reflect the social costs caused by alcohol consumption, it’s important to address these externalities through taxation. 

What is the economic burden of alcohol dependence in Europe?

The economic burden of alcohol dependence in Europe in 2013 was estimated to cost €155.8 billion. This includes both tangible and intangible costs, with the tangible costs of alcohol in 2003 amounting to €125 billion, equivalent to 1.3% of European gross domestic product (GDP), and the intangible costs amounting to €270 billion.

This staggering annual bill created by alcohol addiction encompasses direct healthcare costs from hospitalizations and medical treatment for alcohol-attributable chronic diseases, lost labor force productivity and income through unemployment and absenteeism, and the financial ripple effect that excessive drinking has across families, communities, businesses, and the public. 

How does alcoholism lead to poverty?

Alcoholism frequently leads to financial catastrophe and poverty. There are several factors involved.

  • Unemployment from drinking-related job loss
  • Debt accrual from healthcare and legal expenditures 
  • Reduced income, bankruptcy
  • Damaged credit scores
  • Eligibility for publicly-funded income assistance programs once personal finances are exhausted
  • Homelessness resulting from the inability to afford housing
  • Cycles that precipitate more severe and problematic drinking as a destructive means of coping

How much do alcohol-related collisions cost society?

Alcohol-related motor vehicle crashes cost society about $44 billion annually in the United States. This includes:

  • Losses in the workplace and household productivity
  • Escalating healthcare costs from initial emergency response through long-term rehabilitation
  • Criminal justice costs encompassing property damage, fatalities, litigation, and incarceration
  • Increases in auto insurance premiums
  • Premature mortality valuation

How do you politely say no to alcohol?

To politely decline alcohol, phrases like “No thanks, I’m good with water tonight” or “I try not to drink, but please go ahead” clearly convey temperance without judgment towards others. Use “I” statements rather than directing criticism outwards. This way, you can prevent social awkwardness when abstaining. Ordering non-alcoholic drinks helps divert the focus from sole sobriety to simply hydrating preferences. Be prepared with polite “no alcohol” responses to empower bystanders or moderate drinking in settings where intoxication is the norm.

Is fetal alcohol spectrum disorder an economic burden of alcohol consumption?

Fetal alcohol spectrum disorders (FASDs) from drinking during pregnancy epitomize the economic burden of alcohol consumption, accounting for $6 billion in 2015 according to the Centers for Disease Control and Prevention. Costs accumulate across healthcare expenditures for birth complications and lifelong disabilities, educational services, impaired productivity, and criminal justice. The costs of fetal alcohol syndrome exceed costs for other prevalent conditions such as Down Syndrome, demonstrating how prenatal alcohol exposure perpetuates family adversity and societal resource drainage generationally. 

What workplace productivity losses result from excessive alcohol consumption?

The Centers for Disease Control and Prevention (CDC) estimates over 15% of workers experience some job impairment due to drinking each year—reductions adding up to 72 million lost workdays annually. Manthey, et. al. suggest that between absence and attending work hungover, alcohol misuse drains workplace productivity, exacting $44 to $68 billion yearly in the US and €9 billion across the EU. Hangovers alone decrease capacity by 30% among excessive drinkers. 

Lost labor force contributions then reduce household incomes and macroeconomic growth. Supporting recovery, implementing workplace interventions, and shifting cultural attitudes around drinking could recapture drained potential.

How do individual healthcare costs and national economic burdens relate to alcohol?

Excessive alcohol consumption incurs a ripple effect, permeating from individual healthcare expenditures to national economic burdens. Hospital care for injury or chronic illness results in out-of-pocket costs and reduced earnings among excessive drinkers. Meanwhile, alcohol-attributable chronic diseases such as liver cirrhosis and cancers become leading drains in emergency departments. 

With over $250 billion in yearly costs nationally—3% of total U.S. healthcare spending—the sheer economic burden from individual drinking behaviors becomes unsustainable at scale without better education and public health measures geared towards those affected by alcohol consumption.


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