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Indonesia’s Drinking Problem

In the wake of a crackdown on black-market alcohol in Indonesia, the country’s sole legal alcohol importer is suddenly faced with meeting demand four times higher than what the government’s import quotas allow.

The resulting crunch has led to chronic alcohol shortages and skyrocketing prices across the country, the BBC reports.

Alcohol consumption is generally frowned upon in Indonesia — it’s the most populous Muslim country in the world.

But will higher liquor prices discourage Indonesians from drinking? Or, instead, will more expensive alcohol behave like a Giffen good, becoming that much more in demand?

(Hat tip: Foreign Policy)