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In Vino Pecunia? The Association Between Beverage-Specific Drinking Behavior and Wages

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  • Ziebarth, Nicolas R.
  • Grabka, Markus M.

Abstract

The positive association between moderate alcohol consumption and wages is well documented in the economic literature. Positive health effects as well as networking mechanisms serve as explanations for the “alcohol–income puzzle.” Using individual-based microdata from the SOEP for 2006, we confirm that this relationship exists for Germany as well. More importantly, we shed light on the alcohol–income puzzle by analyzing, for the first time, the association between beverage-specific drinking behavior and wages. In our analysis, we disentangle the general wage effect of drinking into diverse effects for different types of drinkers. Mincerian estimates reveal significant and positive relationships between wine drinkers and wages as well as between multiple beverage drinkers and wages. When splitting the sample into age groups, the “drinking gain” disappears for employees under the age of 35 and increases in size and significance for higher age groups. We also find a “beer gain” for the oldest age group and male residents of rural areas as well as a “cocktail gain” for residents of urban areas. Several explanations for our empirical results are discussed in view of the likelihood that the alcohol–income puzzle is a multicausal phenomenon. --

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Bibliographic Info

Article provided by ZBW - German National Library of Economics in its journal EconStor Open Access Articles.

Volume (Year): (2009-09)
Issue (Month): ()
Pages: 219-244

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Handle: RePEc:zbw:espost:66215

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Keywords: Alcohol–income puzzle; Beverage-specific drinking behavior; Wages; Wine; Socio-Economic Panel Study (SOEP);

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References

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  1. M. Christopher Auld, 2005. "Smoking, Drinking, and Income," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
  2. Jinyong Hahn & Jerry Hausman, 1999. "A New Specification Test for the Validity of Instrumental Variables," Working papers 99-11, Massachusetts Institute of Technology (MIT), Department of Economics.
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  6. Weiwei Feng & Wei Zhou & J.S. Butler & Brenda M. Booth & Michael T. French, 2001. "The impact of problem drinking on employment," Health Economics, John Wiley & Sons, Ltd., vol. 10(6), pages 509-521.
  7. MacDonald, Ziggy & Shields, Michael A, 2001. "The Impact of Alcohol Consumption on Occupational Attainment in England," Economica, London School of Economics and Political Science, vol. 68(271), pages 427-53, August.
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  17. Mullahy, John & Sindelar, Jody L, 1991. "Gender Differences in Labor Market Effects of Alcoholism," American Economic Review, American Economic Association, vol. 81(2), pages 161-65, May.
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Citations

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Cited by:
  1. Jan Marcus, 2012. "Does Job Loss Make You Smoke and Gain Weight?," SOEPpapers on Multidisciplinary Panel Data Research 432, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Peter Eibich & Nicolas R. Ziebarth, 2013. "Examining the Structure of Spatial Health Effects in Germany Using Hierarchical Bayes Models," SOEPpapers on Multidisciplinary Panel Data Research 620, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Eibich, Peter & Ziebarth, Nicolas R., 2014. "Analyzing Regional Variation in Health Care Utilization Using (Rich) Household Microdata," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 41–53.
  4. Cerdá, Magdalena & Johnson-Lawrence, Vicki D. & Galea, Sandro, 2011. "Lifetime income patterns and alcohol consumption: Investigating the association between long- and short-term income trajectories and drinking," Social Science & Medicine, Elsevier, vol. 73(8), pages 1178-1185.
  5. Eibich, P.;, 2014. "Understanding the effect of retirement on health using Regression Discontinuity Design," Health, Econometrics and Data Group (HEDG) Working Papers 14/10, HEDG, c/o Department of Economics, University of York.
  6. Haucap, Justus & Herr, Annika & Frank, Björn, 2011. "In vino veritas: Theory and evidence on social drinking," DICE Discussion Papers 37, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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