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Alcohol consumption and alcohol advertising bans

  • Henry Saffer
  • Dhaval Dave

The purpose of this paper is to empirically examine the relationship between alcohol advertising bans and alcohol consumption. Most prior studies have found no effect of advertising on total alcohol consumption. A simple economic model is provided which explains these prior results. The data set used in this study is a pooled time series of data from 20 countries over 26 years. The empirical model is a simultaneous equations system which treats both alcohol consumption and alcohol advertising bans as endogenous. The primary conclusions of this study are that alcohol advertising bans decrease alcohol consumption and that alcohol consumption has a positive effect on the legislation of advertising bans. The results indicate that an increase of one ban could reduce alcohol consumption by 5% to 8%. The alcohol price elasticity is estimated at about 0.2. The results suggest that recent exogenous decreases in alcohol consumption will decrease the probability of enactment of new bans and undermine the continuance of existing bans. Canada, Denmark, New Zealand and Finland have recently rescinded alcohol advertising bans. Alcohol consumption in these countries may increase or decrease at a slower rate than would have occurred had advertising bans remained in place.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840110102743
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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 34 (2002)
Issue (Month): 11 ()
Pages: 1325-1334

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Handle: RePEc:taf:applec:v:34:y:2002:i:11:p:1325-1334
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  1. 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.
  2. Saffer, Henry, 1993. "Alcohol advertising bans and alcohol abuse: Reply," Journal of Health Economics, Elsevier, vol. 12(2), pages 229-234, July.
  3. 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.
  4. Henry Saffer & Dhaval Dave, 2006. "Alcohol advertising and alcohol consumption by adolescents," Health Economics, John Wiley & Sons, Ltd., vol. 15(6), pages 617-637.
  5. David Blake & Angelika Nied, 1997. "The demand for alcohol in the United Kingdom," Applied Economics, Taylor & Francis Journals, vol. 29(12), pages 1655-1672.
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