| Summary: | This paper aims to analyse the effect of a liberalisation of the alcohol policy in Finland in 2018. With a difference-in-difference analysis we were able to generate estimates of the spirits, beer, wine, cider and mixed drinks sales after the treatment corresponding to adecrease in total sales compared to post treatment. Previous studies show that the cross-priceelasticity of spirits and beer is positive, which implies that individuals substitute spirits forbeer in the case of a price increase of spirits. Furthermore previous studies also show that alcohol sales have increased after similar reforms. Our results do not necessarily correspondwith what previous research shows, which can be a result of other variables such as tax increases. Our primary conclusion is that the effect of an increased illegal production and trade of alcohol is absent in our data and therefore explains the decrease of legitimate alcoholsales whilst alcohol related crime rates has increased.
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