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Habit formation and college students' demand for alcohol


  • Jenny Williams

    (Department of Economics, University of Melbourne, Parkville, Victoria, Australia)


This research investigates whether the positive association between college students' current and high-school drinking is due to habit formation or whether it is solely due to the influence of unobserved individual characteristics that are correlated over time. The empirical investigation is based on individual level data from the 1997 and 1999 waves of the Harvard School of Public Health's College Alcohol Study (CAS). Amemyia's generalized least squares is used to address the heterogeneity issue in examining the relationship between past and current drinking. The results suggest that after controlling for correlation in unobserved characteristics that influence alcohol use, high-school drinking has a significant and positive impact on college drinking, indicating the existence of habit formation. Both structural evidence of habit formation and reduced form results reveal that stricter drunk driving laws faced while in high-school have a long lived effect, reducing drinking while in college. The results also highlight the importance of access to alcohol, both on campus and in the college neighborhood, as a determinant of college students' drinking behavior. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Jenny Williams, 2005. "Habit formation and college students' demand for alcohol," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 119-134.
  • Handle: RePEc:wly:hlthec:v:14:y:2005:i:2:p:119-134 DOI: 10.1002/hec.908

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    References listed on IDEAS

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    7. Jenny Williams & Frank J. Chaloupka & Henry Wechsler, 2005. "Are There Differential Effects of Price and Policy on College Students'Drinking Intensity?," Contemporary Economic Policy, Western Economic Association International, vol. 23(1), pages 78-90, January.
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    Cited by:

    1. Jason Fletcher, 2012. "The Effects of First Occupation on Long Term Health Status: Evidence from the Wisconsin Longitudinal Study," Journal of Labor Research, Springer, vol. 33(1), pages 49-75, March.
    2. Ou Yang & Xueyan Zhao & Preety Srivastava, 2015. "Binge Drinking, Antisocial and Unlawful Behaviours, and Beverage Types," Melbourne Institute Working Paper Series wp2015n03, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
    4. Lorenz Kueng & Evgeny Yakovlev, 2016. "Long-Run Effects of Public Policies: Endogenous Alcohol Preferences and Life Expectancy in Russia," Working Papers w0219, Center for Economic and Financial Research (CEFIR).
    5. Irina Grafova, 2007. "Your Money or Your Life: Managing Health, Managing Money," Journal of Family and Economic Issues, Springer, vol. 28(2), pages 285-303, June.
    6. Thomas Demuynck & Ewout Verriest, 2013. "I’Ll Never Forget My First Cigarette: A Revealed Preference Analysis Of The “Habits As Durables” Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(2), pages 717-738, May.
    7. Lan Liang & Jidong Huang, 2008. "Go out or stay in? The effects of zero tolerance laws on alcohol use and drinking and driving patterns among college students," Health Economics, John Wiley & Sons, Ltd., vol. 17(11), pages 1261-1275.
    8. Jason Fletcher, 2012. "Peer influences on adolescent alcohol consumption: evidence using an instrumental variables/fixed effect approach," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1265-1286, October.

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