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Alcohol advertising and alcohol consumption by adolescents

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  • Henry Saffer
  • Dhaval Dave

Abstract

This study investigates the effects of alcohol advertising on adolescent alcohol consumption. The theory of an industry response function and evidence from prior studies indicate the importance of maximizing the variance in advertising measures. Monitoring the Future (MTF) and National Longitudinal Survey of Youth 1997 (NLSY97) data are augmented with alcohol advertising, originating on the market level, for five media. The large sample of the MTF allows estimation of race and gender-specific models. The longitudinal nature of the NLSY97 allows controls for unobserved heterogeneity with state-level and individual fixed effects. Price and advertising effects are generally larger for females relative to males. Controls for individual heterogeneity yield larger advertising effects, implying that the MTF results may understate the effects of alcohol advertising. Results from the NLSY97 suggest that a 28% reduction in alcohol advertising would reduce adolescent monthly alcohol participation from 25% to between 24 and 21%. For binge participation, the reduction would be from 12% to between 11 and 8%. The past month price-participation elasticity is estimated at −0.26, consistent with prior studies. The results show that reduction of alcohol advertising can produce a modest decline in adolescent alcohol consumption, though effects may vary by race and gender. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1091
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 15 (2006)
Issue (Month): 6 ()
Pages: 617-637

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Handle: RePEc:wly:hlthec:v:15:y:2006:i:6:p:617-637

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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References

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  1. Becker, Gary S & Murphy, Kevin M, 1993. "A Simple Theory of Advertising as a Good or Bad," The Quarterly Journal of Economics, MIT Press, vol. 108(4), pages 941-64, November.
  2. Martyn Duffy, 2001. "Advertising in consumer allocation models: choice of functional form," Applied Economics, Taylor & Francis Journals, vol. 33(4), pages 437-456.
  3. Henry Saffer & Frank Chaloupka, 1998. "Demographic Differentials in the Demand for Alcohol and Illicit Drugs," NBER Working Papers 6432, National Bureau of Economic Research, Inc.
  4. Duffy, Martyn, 1995. "Advertising in demand systems for alcoholic drinks and tobacco: A comparative study," Journal of Policy Modeling, Elsevier, vol. 17(6), pages 557-577, December.
  5. 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.
  6. 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.
  7. Dills, Angela K. & Jacobson, Mireille & Miron, Jeffrey A., 2005. "The effect of alcohol prohibition on alcohol consumption: evidence from drunkenness arrests," Economics Letters, Elsevier, vol. 86(2), pages 279-284, February.
  8. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
  9. Henry G. Grabowski, 1976. "The Effects of Advertising on the Interindustry Distribution of Demand," NBER Chapters, in: Explorations in Economic Research, Volume 3, number 1, pages 21-75 National Bureau of Economic Research, Inc.
  10. Henry Saffer & Dhaval Dave, 2002. "Alcohol consumption and alcohol advertising bans," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1325-1334.
  11. Young, Douglas J., 1993. "Alcohol advertising bans and alcohol abuse: Comment," Journal of Health Economics, Elsevier, vol. 12(2), pages 213-228, July.
  12. David Blake & Angelika Nied, 1997. "The demand for alcohol in the United Kingdom," Applied Economics, Taylor & Francis Journals, vol. 29(12), pages 1655-1672.
  13. Ornstein, Stanley I & Hanssens, Dominique M, 1985. " Alcohol Control Laws and the Consumption of Distilled Spirits and Beer," Journal of Consumer Research, University of Chicago Press, vol. 12(2), pages 200-213, September.
  14. Saffer, Henry, 1991. "Alcohol advertising bans and alcohol abuse: An international perspective," Journal of Health Economics, Elsevier, vol. 10(1), pages 65-79, May.
  15. Nelson, Jon P. & Young, Douglas J., 2001. "Do Advertising Bans Work? An International Comparison," Working Papers 6-01-1, Pennsylvania State University, Department of Economics.
  16. Nelson, Jon P., 2001. "Alcohol Advertising and Advertising Bans: A Survey of Research Methods, Results, and Policy Implications," Working Papers 7-01-2, Pennsylvania State University, Department of Economics.
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Citations

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Cited by:
  1. Dave, Dhaval & Saffer, Henry, 2008. "Alcohol demand and risk preference," Journal of Economic Psychology, Elsevier, vol. 29(6), pages 810-831, December.
  2. PESTIEAU, Pierre & PONTHIERE, Grégory, . "Myopia, regrets, and risky behaviors," CORE Discussion Papers RP -2452, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Dave, Dhaval & Saffer, Henry, 2013. "Demand for smokeless tobacco: Role of advertising," Journal of Health Economics, Elsevier, vol. 32(4), pages 682-697.
  4. Henry Saffer & Dhaval Dave, 2002. "Alcohol consumption and alcohol advertising bans," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1325-1334.
  5. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
  6. Zimmerman, Paul R. & Benson, Bruce L., 2007. "Alcohol and rape: An "economics-of-crime" perspective," International Review of Law and Economics, Elsevier, vol. 27(4), pages 442-473, December.
  7. Mullins, Michelle & Milyo, Jeffrey & Sykuta, Michael E., 2006. "Regulating for Public Health: Motivations for and Efficacy of State Alcohol Regulations," 2006 Annual meeting, July 23-26, Long Beach, CA 21176, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. Niko de Silva & Benno Torgler, 2011. "Smoke Signals and Mixed Messages: Medical Marijuana & Drug Policy Signalling Effects," CREMA Working Paper Series 2011-18, Center for Research in Economics, Management and the Arts (CREMA).
  9. Henry Saffer & Frank Chaloupka, 1999. "Tobacco Advertising: Economic Theory and International Evidence," NBER Working Papers 6958, National Bureau of Economic Research, Inc.
  10. Ligeon, Carel & Gregorowicz, Philip & Jolly, Curtis M., 2007. "Factors Influencing Alcohol Consumption In Caribbean And Latin American Countries," 2006 West Indies Agricultural Economics Conference, July 2006, San Juan, Puerto Rico 36956, Caribbean Agro-Economic Society.
  11. Shin-Yi Chou & Inas Rashad & Michael Grossman, 2005. "Fast-Food Restaurant Advertising on Television and Its Influence on Childhood Obesity," NBER Working Papers 11879, National Bureau of Economic Research, Inc.
  12. Sen, Bisakha, 2009. "The relationship between frequency of family dinner and adolescent problem behaviors after adjusting for other family characteristics," MPRA Paper 24329, University Library of Munich, Germany.
  13. Nelson, Jon P., 2001. "Alcohol Advertising and Advertising Bans: A Survey of Research Methods, Results, and Policy Implications," Working Papers 7-01-2, Pennsylvania State University, Department of Economics.

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