Social costs of the abuse of addictive substances directly reduce – besides personal damages – the overall social welfare and therefore should be deducted in an alternative welfare measure. In a wider sense, they have to be regarded as “repair costs” that would not exist without the abuse of these substances. However, both consumption expenditures and medical and rehabilitation measures positively contribute to GDP.
The integration of this component into the calculation of the NWI is a first step towards a more systematic record of the problems of addiction. Besides alcohol, tobacco and drugs this also concerns the abuse of medication which could be considered in forthcoming revision.
Moreover, other forms of addiction not associated with the intake of substances, such as gambling- or internet addiction, could be considered, since they also lead to enormous therapeutic costs, loss of work force and other direct economic externalities. Insofar the accounting for this component is rather conservative, negative consequences and social costs are presumably much higher.
Because of data deficits, an interpretation of the component’s development is not possible at the moment. However, the estimated annual costs of approximately 66 to 68 billion euro very clearly point out that alcohol, tobacco and illegal drug abuse affect societal welfare to a great extent.
The objective is to minimize costs from alcohol- and other addiction related illnesses. This also includes prevention measures on different social levels.