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Beernomic Impact Studies

I’ve held on to this post for a few days because it occurred to me when I initially conceived it that I write a lot of things here that are critical of the craft-beer-drinking worl. I tend to defend the Big Three against what I think are nonsensical attacks, while not writing posts when I agree with other attacks against them; I tend to write posts defending the notion of marketing; I tend to agree with those that would overtly write “drink responsibly” everywhere they can. I criticize scientific studies that I think use questionable methods, primarily when those conclusions are pro-booze, while not linking to pro-booze stories I support. The reason for this is simple, I get most of my liquor news from liquor evangelists and my deeply rooted contrarianism leads me to respond with “the other side of the story” as often as possible, not necessarily because I believe it, but because my knee jerks when I see people going to too far to one side or the other. It’s not always the case that the right place is in the middle of two extreme points, but it is the case that even when we are to one side of an argument, we not be so far that we cannot at least something of the other side, something that tempers our extremism, something that leaves room open to be persuaded by alternative arguments.

Which leads me to this, a recent economic impact study of the craft beer industry. I have no problems with economic impact studies. I like them. I enjoy them. I often write the authors a list of questions they often fail to respond to. But I am always uncomfortable with the intent or possible implications of these studies. Economic impact analyses are often written (or paid for) by industry lobbying groups with a bias in favor of exaggerating the economic impact of the industry. There are lot of assumption in economic impact studies: you can pick and choose variables, you can pick and choose the method of measuring those variables, you can choose how you weight the importance of those variables, you can pick and choose how many levels of effect you want to measure. It’s very easy to generate numbers that don’t reflect what’s really going on. But the intent of these studies is to write a report that claims the highest “economic impact” that is at least moderately supportable.

The reason these exist is to highlight the (1) the number of jobs dependent on the industry and (2) the number of tax dollars generated and maybe (3) the level of philanthropy from the constituent participants in the industry. All of these to make it harder to pass laws that would limit (or eliminate) those benefits (i.e., by curtailing the growth of the industry through additional regulations or tax increases).

What is always left out of such reports is any notion of questioning whether this is how we want our fellow citizens to make money. For example, no one has (as far as I know) done a full impact study on the economic or social benefits of the illicit drug trade. Every so often you will hear about a soccer field that Pablo Escobar built or a clinic built in a poor neighborhood in Tijuana, but no one talks about the money that is passed into banks’ coffers through laundering, or the amount of leisure cash collected by drug cartel “soldiers and spent in local shops.  Nobody talks about how many Escalades have been bought from legitimate car dealers destined to be armored and driven through Mexico’s deserts or mountain passes. Those cars contribute to Cadillac’s bottom line, they support union workers, janitors, salesmen, etc. Stop the drug trade, and you take away those sales. You take away the sales taxes collected from purchases made at convenience stores by inner-city youths in the employ of domestic distribution networks (read: gangs). No one writes these pieces because we all know we don’t want people participating in these activities even if they generate trillions of dollars in “economic impact.” (btw, they do).

I don’t want people to think I’m comparing Craft Brewers to Cocaine Barons. I am in full support of a profitable and growing craft beer industry. I want it bigger than it is today. I think the work is honest. I think the product is excellent. I think a vibrant local beer market has proven to have extremely positive economic, psychological, social, and artistic benefits all across the country.

I just think it’s worth pointing out that the mere fact that beer has a measurable positive impact on economies is to be taken as the sole argument for its continued existence. And the reverse of this is true to. You sometimes read economic impact studies that try to diminish the effect that new regulations or taxes might have on the beer industry, the fact that these changes are small are taken as evidence that we should do them. Economic impact is never and argument for whether we should nor shouldn’t do a thing. They can lend support, I guess. But the real value question lies elsewhere.

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Posted in The Drinking Class.