beer

I’ve often heard that before modern water treatment, it was safer to drink beer; but I’ve also heard people call this a historical myth. A new paper in the Journal of Development Economics by Francisca Antman and James Flynn comes down strongly on the side of “beer really was safer”:

This paper provides the first quantitative estimates into another well-known water alternative during the Industrial Revolution in England.

Although beer in the present day is regarded as being worse for health than water, several features of both beer and water available during this historical period suggest the opposite was likely to be true. First, brewing beer requires boiling the water, which kills many dangerous pathogens often found in drinking water. As Bamforth (2004) puts it, “the boiling and the hopping were inadvertently water purification techniques”. Second, alcohol itself has antiseptic qualities. Homan (2004) notes that “because the alcohol killed many detrimental microorganisms, it was safer to drink than water” in the ancient near-east.

They use several identification strategies to establish this, for instance when a tax on malt was increased and mortality went up:

But did this mean people were drunk all the time? Probably not:

beer in this period was generally much weaker than it is today, and thus would have been closer to purified water. Accum (1820) found that common beers in late 18th and early 19th century England averaged just 0.75% alcohol by volume, a fraction of the content of the beers of today. Beer in this period was therefore far less harmful to the liver. Taken together, these facts suggest that beer had many of the benefits of purified water with fewer of the health risks associated with beer consumption today.

In fact, people at the time didn’t necessarily know that beer was healthier:

Thus, even though people did not recognize beer as a safer choice, drinking beer would have been an unintentional improvement over water, and thus may have contributed to improvements in human health and economic development over the period we investigate

Though as usual, Adam Smith was ahead of his time. Here’s what he had to say in his 1776 Wealth of Nations, in a chapter on malt taxes:

Spirituous liquors might remain as dear as ever, while at the same time the wholesome and invigorating liquors of beer and ale might be considerably reduced in their price.

The latest inflation data for the US has been released, and the headline CPI-U annual increase of 5.4% is once again raising worries that high inflation could be a permanent part of the landscape for the near future.

My personal opinion is that the picture is much too muddled now, between temporary supply issues and low bases for 2020 prices, to say much about the medium-term picture. I think we’ll have a better picture by the end of the year. Still, it’s worth drilling down into the data, as we have done in the past on this blog, to understand some things about economics, prices, and how price changes are impacting real people.

Certainly the prices of some goods are rising at alarming rates. Many of these are related to automobiles and transportation generally, but some categories of food have rose a lot in the past year too (though groceries overall are only up 2.6%).

But I want to talk about two categories of consumption: beer and hot dogs.

Actually, my co-blogger Zachary has already written about beer. And using the producer price index, he found that canned beer is actually cheaper than it was a year ago. If you like canned beer, rejoice! And for all beer at home, the CPI shows only a 1.8% increase since last year, after a similar small 1.6% increase last July (not much of a base effect… a clue for later!).