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Estimation of Individual Demand for Alcohol

Author

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  • 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.

Suggested Citation

  • Yuriy Andrienko & A. Nemtsov, 2006. "Estimation of Individual Demand for Alcohol," Working Papers w0089, Center for Economic and Financial Research (CEFIR).
    • Handle: RePEc:cfr:cefirw:w0089
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    Cited by:

    1. Jon P. Nelson, 2014. "Gender Differences In Alcohol Demand: A Systematic Review Of The Role Of Prices And Taxes," Health Economics, John Wiley & Sons, Ltd., vol. 23(10), pages 1260-1280, October.
    2. M. G. Kolosnitsyna & N. A. Khorkina & M. T. Sitdikov, 2017. "Alcohol trade restrictions and alcohol consumption: On the effectiveness of state policy," Studies on Russian Economic Development, Springer, vol. 28(5), pages 548-557, September.
    3. Popov, Vladimir, 2009. "Mortality Crisis in Russia Revisited: Evidence from Cross-Regional Comparison," MPRA Paper 21311, University Library of Munich, Germany, revised Dec 2009.
    4. Evgeny Yakovlev, 2016. "Demand for Alcohol Consumption and Implication for Mortality: Evidence from Russia," Working Papers w0221, New Economic School (NES).
    5. Anne Ludbrook & John Holmes & Tim Stockwell, 2014. "Gender Differences In Alcohol Demand: A Systematic Review Of The Role Of Prices And Taxes. Comment On Conclusions By Nelson," Health Economics, John Wiley & Sons, Ltd., vol. 23(10), pages 1281-1283, October.
    6. Alexander S. Skorobogatov, 2014. "The Effect Of Closing Hour Restrictions On Alcohol Use And Abuse In Russia," HSE Working papers WP BRP 63/EC/2014, National Research University Higher School of Economics.
    7. Bartkus Algirdas, 2019. "The Impact of Excise Tax Increases on Ethyl Alcohol Sales in Lithuania," Ekonomika (Economics), Sciendo, vol. 98(2), pages 55-75, December.
    8. Marina Kolosnitsyna & Varvara Sukhanova, 2023. "Price elasticities revisited: The effect of price changes caused by taxation on the amount of alcohol consumed," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 69, pages 28-47.

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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