Beer and chocolate

At an EU policy round table in Brussels today, the Hungarian Socialist MEP Edit Herczog brought up an interesting example of the way legislation can have unforeseen and unintended consequences. Herczog referred to an attempt by the Hungarian government in 1984 to reduce beer consumption by increasing the level at which it was taxed. Much to everyone's surprise, beer consumption was not affected by the move, but chocolate consumption fell appreciably. The reason: Many Hungarian men would go to football matches at weekends and have a few beers afterwards; they would also bring home chocolate for their children. When the price of beer went up, they carried on drinking, but stopped bringing home the chocolate!
A nice illustration of the need to look beyond simple econometric models when assessing the potential impact of new legislation.