Can government intervention be effective in correcting market failures associated with alcohol? I chose to perform a microeconomic analysis on the effects of alcohol consumption on society. The question that arises is: “Can government intervention be effective in correcting market failures associated with alcohol.” The model I will explore is that of “market failure” “where the market mechanism fails to allocate resources efficiently” (Smith et al, 2006, p.56). Times alcohol-related treatment costs the NHS £1.7 billion. The TelegraphLondoners are losing a staggering 1.68 million working days due to alcohol-related absences.''The Telegraph' microcosmically shows how the problem prevails around us as a society. This is clear from numerous sources, including "Alcohol Concern", which describe the "epidemic" proportions of the problem. Mark P. Taylor describes economics as “the study of how society manages its scarce resources” (2006, p.5). The issue is clearly rooted in individual decision making and analysis of how society is allocating its limited resources. The 3 main issues below exemplify the 3 main causes of market failure. Information: Failure to provide good information (a public good) is a major cause of market failure and leads to the consequences of alcohol consumption, thus reducing market efficiency. Evidence suggests that advertising has a strong detrimental effect on consumption, particularly for young people. (Saffer and Dave, 2003). The development of markets that promote alcohol consumption benefits industry groups, yet none of these private incentives provide information that presents the negative consequences of consumption. Self-control problems: "1.2 million incidents of violence are alcohol-related" (The Times, 2007) and 360,000 incidents of domestic violence perpetrated (Simmons, BBC.co.uk) show a lack of control. An intervention is taking place, a four-year government review of the nation's alcohol culture has uncovered a system that encourages people to drink to the point of collapse, incurring costs such as health for society as a whole, then goods and services provided by the market are not within our reach. interests that cost our society its efficiency. Externality: Alcohol (a demerit good and not the best interests of society) creates private costs for individuals and broader social costs, for example the behavior of those who are intoxicated in the wider community. Exemplifying the problem are the National Health Service and medical costs incurred by alcohol consumption, which are not only borne privately by the individual. Higher-than-average medical costs will be partly covered by public funding. For this reason alone there should be a public interest in limiting alcohol use. Decision makers do not take into account the cost imposed on society and others as a result of their decision