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Estimation of Individual Demand for Alcohol

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Author Info
Yuriy Andrienko () (CEFIR)
A. Nemtsov
Abstract

Using individual data from RLMS, the longitudinal survey of the representative sample of the Russian population, we study static and dynamic models of demand for alcohol. We show the demand curve has traditional negative slope for any type of alcoholic drink: vodka, beer, and wine. We find substitution of moonshine for vodka with higher price on vodka and between vodka&beer with higher price on one of them. As a result of substitution vodka price has no impact on total ethanol consumption, while higher price on beer and wine reduce demand for ethanol. We also demonstrate that income has important effect on demand for alcoholic drinks. Risk to be drinker is rising with individual income. Higher income results in lower consumption of moonshine and in higher consumption of vodka, beer, and wine.

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Publisher Info
Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0089.

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Length: 43 pages
Date of creation: Jan 2006
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Handle: RePEc:cfr:cefirw:w0089

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Keywords: Alcohol Demand Russia

Find related papers by JEL classification:
I1 - Health, Education, and Welfare - - Health
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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