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The Economic Determinants Of Alcohol Consumption

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  • Kenneth W. Clements
  • Saroja Selvanathan

Abstract

In this paper is presented an analysis of the consumption patterns of beer, wine and spirits for Australia using data for the period 1955/56-1985/86. The validity of the demand theory hypotheses demand homogeneity and Slutsky symmetry has been tested using recently developed distribution� free procedures. The findings were that (i) beer and wine were necessities and spirits a strong luxury; (ii) beer and spirits are specific complements; and (iii) the homogeneity and symmetry hypotheses are acceptable. Preference for wine consumption seems to be independent of preference for beer and spirits.

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File URL: http://hdl.handle.net/10.1111/j.1467-8489.1991.tb00506.x
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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): 35 (1991)
Issue (Month): 2 (08)
Pages: 209-231

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Handle: RePEc:bla:ajarec:v:35:y:1991:i:2:p:209-231

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References

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  1. 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.
  2. Barnett, William A, 1979. "Theoretical Foundations for the Rotterdam Model," Review of Economic Studies, Wiley Blackwell, vol. 46(1), pages 109-30, January.
  3. Penm, Jammie H, 1988. "An Econometric Study of the Demand for Bottled, Canned and Bulk Beer," The Economic Record, The Economic Society of Australia, vol. 64(187), pages 268-74, December.
  4. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
  5. Laitinen, Kenneth, 1978. "Why is demand homogeneity so often rejected?," Economics Letters, Elsevier, vol. 1(3), pages 187-191.
  6. Selvanathan, E A, 1991. "Further Results on Aggregation of Differential Demand Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(4), pages 799-805, July.
  7. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  8. Jones, Andrew M, 1989. "A Systems Approach to the Demand for Alcohol and Tobacco," Bulletin of Economic Research, Wiley Blackwell, vol. 41(2), pages 85-105, April.
  9. Kenneth W. Clements & E. Antony Selvanathan, 1988. "The Rotterdam Demand Model and its Application in Marketing," Marketing Science, INFORMS, vol. 7(1), pages 60-75.
  10. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-83, June.
  11. Clements, Kenneth W & Selvanathan, Antony & Selvanathan, Saroja, 1996. "Applied Demand Analysis: A Survey," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 63-81, March.
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Cited by:
  1. Wittwer, Glyn & Anderson, Kym, 1999. "Accounting for Growth in Australia’s Grape and Wine Industries, 1986 to 2003," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 125043, Australian Agricultural and Resource Economics Society.
  2. Petrie, Dennis & Doran, Christopher & Shakeshaft, Anthony & Sanson-Fisher, Rob, 2009. "The demand for intensity versus frequency of alcohol consumption: Evidence from rural Australia," SIRE Discussion Papers 2009-01, Scottish Institute for Research in Economics (SIRE).
  3. James Fogarty, 2004. "The Own-Price Elasticity of Alcohol: A Meta-Analysis," Economics Discussion / Working Papers 04-01, The University of Western Australia, Department of Economics.
  4. Kenneth W. Clements & Yihui Lan & Xueyan Zhao, 2005. "The Demand for Vice: Inter-Commodity Interactions with Uncertainty," Economics Discussion / Working Papers 05-30, The University of Western Australia, Department of Economics.
  5. Edward Oczkowski, 1994. "A Hedonic Price Function For Australian Premium Table Wine," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 38(1), pages 93-110, 04.
  6. Geoffrey Kingston & Martin Melecky, 2005. "Currency preferences and the Australian dollar," International Finance 0502006, EconWPA.
  7. Saroja Selvanathan, 2006. "How similar are alcohol drinkers? International evidence," Applied Economics, Taylor and Francis Journals, vol. 38(12), pages 1353-1362.
  8. E. A. Selvanathan & S. Selvanathan, 2004. "Economic and demographic factors in Australian alcohol demand," Applied Economics, Taylor and Francis Journals, vol. 36(21), pages 2405-2417.
  9. Wittwer, Glyn, 2000. "The Sensitivity Of Wine Industry Outcomes To Model Assumptions In Gst Scenarios," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123742, Australian Agricultural and Resource Economics Society.

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