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Government Interdiction

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The sale and consumption of any good is primarily determined by the market forces of supply and demand for the particular good. There are various factors which affect the supply and demand of any good – the price of the good, the price of related goods, and the preferences of the consumer and so on. Similarly, government interdiction is one of the major factors that affect these market forces. In this project, the researcher has tried to analyze how government interdiction on alcohol affects the consumption of alcohol. This project focuses on the prohibition of alcohol in the states of Mizoram and Nagaland.
Prohibition refers to. A dry state is a state where prohibition is applied, that is a state in which the manufacture, distribution, importation, …show more content…

Predominantly, the influence of the Church can be seen in these areas. The Church, an institution of faith, has access to many residents of these states on a daily basis. By this virtue, it has a major influence on the masses – the power to mobilize people around the views propounded by it. Many organizations led by the masses, influenced by the Church, vehemently defend the total ban of alcohol in these states. The Church being a powerful force in the political arena holds some sway over the regulations that control sale of alcohol. An example of this can be seen in the reaction of the Church to the lifting of the total ban on alcohol in the state of Mizoram. The Church has called upon the government to continue with the total prohibition and also asked the people not to endorse and act upon the new Bill which regulates liquor …show more content…

The aim of a total ban is to reduce the use of alcohol. It cuts of the supply of alcohol by imposing complete restriction on sellers. Its direct effect is on the sellers and not the buyers. A total ban means that the government spends its resources in restricting the flow of alcohol into the state and arrests sellers of alcohol – the cost of selling alcohol is thus increased. When the price of alcohol increases, the quantity of alcohol supplied decreases. This does not deter the consumers’ demand for alcohol – the amount of alcohol demanded by a consumer at any given price remains unaffected. As shown in Figure 1, the supply curve shifts to the left, from S1 to S2 but the demand curve remains the same. The equilibrium or the market price thus rises from P1 to P2 whereas the equilibrium quantity falls from Q1 to Q2 – that is there is reduction in quantity of alcohol use due to alcohol

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