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The demand for alcohol: a meta-analysis of elasticities

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Author Info

  • Gallet, Craig A.

Abstract

Numerous studies have estimated elasticities of alcohol demand using different procedures. Because of widespread differences in demand estimates, however, it is difficult to synthesise the literature into coherent meaning. This study improves our understanding of alcohol demand by reporting results from a meta-analysis of 132 studies. Specifically, regressing estimated price, income and advertising elasticities of alcohol on variables accounting for study characteristics, we find alcohol elasticities to be particularly sensitive to demand specification, data issues and various estimation methods. Furthermore, compared to other alcoholic beverages, beer elasticities tend to be more inelastic.

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File URL: http://purl.umn.edu/118323
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Bibliographic Info

Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 51 (2007)
Issue (Month): 2 (June)
Pages:

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Handle: RePEc:ags:aareaj:118323

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Related research

Keywords: alcohol demand; elasticity; meta-analysis; Demand and Price Analysis;

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References

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  1. Jon P. Nelson, 1999. "Broadcast Advertising and U.S. Demand for Alcoholic Beverages," Southern Economic Journal, Southern Economic Association, vol. 65(4), pages 774-790, April.
  2. Espey, Molly & Thilmany, Dawn D., 2000. "Farm Labor Demand: A Meta-Regression Analysis Of Wage Elasticities," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(01), July.
  3. Barnett, Paul G. & Keeler, Theodore E. & Hu, Teh-wei, 1995. "Oligopoly structure and the incidence of cigarette excise taxes," Journal of Public Economics, Elsevier, vol. 57(3), pages 457-470, July.
  4. Espey, Molly, 1998. "Gasoline demand revisited: an international meta-analysis of elasticities," Energy Economics, Elsevier, vol. 20(3), pages 273-295, June.
  5. Eugene M. Lewit & Douglas Coate & Michael Grossman, 1981. "The Effects of Government Regulation on Teenage Smoking," NBER Working Papers 0655, National Bureau of Economic Research, Inc.
  6. Johnson, James A & Oksanen, Ernest H, 1977. "Estimation of Demand for Alcoholic Beverages in Canada from Pooled Time Series and Cross Sections," The Review of Economics and Statistics, MIT Press, vol. 59(1), pages 113-18, February.
  7. Lariviere, Eric & Larue, Bruno & Chalfant, Jim, 2000. "Modeling the demand for alcoholic beverages and advertising specifications," Agricultural Economics, Blackwell, vol. 22(2), pages 147-162, March.
  8. Smith, V Kerry & Huang, Ju-Chin, 1995. "Can Markets Value Air Quality? A Meta-analysis of Hedonic Property Value Models," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 209-27, February.
  9. Craig A. Gallet, 2003. "Advertising and Restrictions in the Cigarette Industry: Evidence of State-by-State Variation," Contemporary Economic Policy, Western Economic Association International, vol. 21(3), pages 338-348, 07.
  10. Clements, Kenneth W & Johnson, Lester W, 1983. "The Demand for Beer, Wine, and Spirits: A Systemwide Analysis," The Journal of Business, University of Chicago Press, vol. 56(3), pages 273-304, July.
  11. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
  12. Craig A. Gallet & John A. List, 2003. "Cigarette demand: a meta-analysis of elasticities," Health Economics, John Wiley & Sons, Ltd., vol. 12(10), pages 821-835.
  13. Jon Nelson, 2003. "Advertising Bans, Monopoly, and Alcohol Demand: Testing for Substitution Effects using State Panel Data," Review of Industrial Organization, Springer, vol. 22(1), pages 1-25, February.
  14. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
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Citations

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Cited by:
  1. Yen, Steven T. & Yuan, Yan & Liu, Xiaowen, 2009. "Alcohol consumption by men in China: A non-Gaussian censored system approach," China Economic Review, Elsevier, vol. 20(2), pages 162-173, June.
  2. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
  3. Thompson, Stanley R. & Sam, Abdoul G., 2008. "Country of Origin Advertising and U.S. Wine Imports," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6553, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Kolawole Ogundari, 2013. "A Note on Socio-Economic Characteristics and the Demand for Beverages in Nigeria: Does Income Matter?," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 43(3), pages 293-302, December.
  5. Friberg, Richard & Paterson, Robert W & Richardson, Andrew D, 2010. "Why is there a home bias? A case study of Wine," CEPR Discussion Papers 7885, C.E.P.R. Discussion Papers.
  6. Meng, Yang & Brennan, Alan & Purshouse, Robin & Hill-McManus, Daniel & Angus, Colin & Holmes, John & Meier, Petra Sylvia, 2014. "Estimation of own and cross price elasticities of alcohol demand in the UK—A pseudo-panel approach using the Living Costs and Food Survey 2001–2009," Journal of Health Economics, Elsevier, vol. 34(C), pages 96-103.
  7. Amikuzuno, Joseph & Ogundari, Kolawole, 2012. "The Contribution of Agricultural Economics to Price transmission Analysis and Market Policy in Sub-Sahara Africa: What Does the Literature Say?," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134754, Agricultural Economics Society.
  8. Cooper, James C. & Wright, Joshua D., 2012. "Alcohol, antitrust, and the 21st Amendment: An empirical examination of post and hold laws," International Review of Law and Economics, Elsevier, vol. 32(4), pages 379-392.
  9. Deselnicu, Oana C. & Costanigro, Marco & Souza-Monteiro, Diogo M. & McFadden, Dawn Thilmany, 2013. "A Meta-Analysis of Geographical Indication Food Valuation Studies: What Drives the Premium for Origin-Based Labels?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(2), August.
  10. Preety Srivastava & Keith R. McLaren & Michael Wohlgenant & Xueyan Zhao, 2014. "Econometric Modelling of Price Response by Alcohol Types to Inform Alcohol Tax Policies," Monash Econometrics and Business Statistics Working Papers 5/14, Monash University, Department of Econometrics and Business Statistics.
  11. Gallet, Craig A., 2010. "The income elasticity of meat: a meta-analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), December.
  12. Zoltan Bakucs & Imre Ferto & Jan Falkowski, 2013. "What causes asymmetric price transmission in agro-food sector? Meta-analysis perspective," IEHAS Discussion Papers 1303, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  13. Henry Saffer & Dhaval Dave & Michael Grossman, 2012. "Behavioral Economics and the Demand for Alcohol: Results from the NLSY97," NBER Working Papers 18180, National Bureau of Economic Research, Inc.
  14. Jon P. Nelson, 2013. "Does Heavy Drinking by Adults Respond to Higher Alcohol Prices and Taxes? A Survey and Assessment," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 43(3), pages 265-291, December.
  15. Benjamin Volland, 2013. "The History of an Inferior Good: Beer Consumption in Germany," Papers on Economics and Evolution 2012-19, Max Planck Institute of Economics, Evolutionary Economics Group.
  16. Ogundari, Kolawole & Abdulai, Awudu, 2013. "Examining the heterogeneity in calorie–income elasticities: A meta-analysis," Food Policy, Elsevier, vol. 40(C), pages 119-128.
  17. Joshua Byrnes & Dennis J. Petrie & Christopher M. Doran & Anthony Shakeshaft, 2012. "The Efficiency of a Volumetric Alcohol Tax in Australia," Applied Health Economics and Health Policy, Springer Healthcare | Adis, vol. 10(1), pages 37-49.
  18. Jon Nelson, 2013. "Meta-analysis of alcohol price and income elasticities – with corrections for publication bias," Health Economics Review, Springer, vol. 3(1), pages 1-10, December.
  19. Ogundari, Kolawole & Abdulai, Awudu, 2012. "A meta-analysis of the response of calorie demand to income changes," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123287, International Association of Agricultural Economists.
  20. Nelson, Jon P., 2014. "Estimating the price elasticity of beer: Meta-analysis of data with heterogeneity, dependence, and publication bias," Journal of Health Economics, Elsevier, vol. 33(C), pages 180-187.

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