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

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  • Nicolas R. Ziebarth
  • Markus M. Grabka

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 GSOEP 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 beverage-unspecific drinkers and wages. We are unable to detect endogeneity problems with the drinking variables, which speaks in favor of OLS regressions. When splitting the sample into age groups, the "wine 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 residents of rural areas and 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

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 93.

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Length: 22 : Anh. p.
Date of creation: 2008
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Handle: RePEc:diw:diwsop:diw_sp93

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Keywords: "alcohol-income puzzle"; beverage-specific drinking behavior; wages; wine;

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References

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  1. French, Michael T. & Zarkin, Gary A., 1995. "Is moderate alcohol use related to wages? Evidence from four worksites," Journal of Health Economics, Elsevier, Elsevier, vol. 14(3), pages 319-344, August.
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Citations

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Cited by:
  1. Eibich, Peter & Ziebarth, Nicolas, 2013. "Examining the Structure of Spatial Health Effects using Hierarchical Bayes Models," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order, Verein für Socialpolitik / German Economic Association 79844, Verein für Socialpolitik / German Economic Association.
  2. 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.
  3. 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).
  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, Elsevier, vol. 73(8), pages 1178-1185.
  5. Haucap, Justus & Herr, Annika & Frank, Björn, 2011. "In vino veritas: Theory and evidence on social drinking," DICE Discussion Papers, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) 37, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  6. Peter Eibich, 2014. "Understanding the Effect of Retirement on Health Using Regression Discontinuity Design," SOEPpapers on Multidisciplinary Panel Data Research 669, DIW Berlin, The German Socio-Economic Panel (SOEP).
  7. Justus Haucap & Annika Herr, 2014. "A note on social drinking: In Vino Veritas," European Journal of Law and Economics, Springer, Springer, vol. 37(3), pages 381-392, June.

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