The external costs of alcohol abuse.

This study reviews the economic concepts of external and private costs and interprets them in the context of alcohol abuse. Previous economic cost studies by NIAAA are found inadequate in that they fail to differentiate between external and private costs. This study differentiates between external and private costs. This study finds that the external costs of alcohol abuse in 1985 were $9.5 billion with an additional $4.5 billion in government incurred costs. Policy implications of this finding are discussed.