IDEAS home Printed from https://ideas.repec.org/p/cfr/cefirw/w0089.html
   My bibliography  Save this paper

Estimation of Individual Demand for Alcohol

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.cefir.ru/papers/WP89_eng_Andrienko_Nemtsov.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chaloupka, Frank, 1991. "Rational Addictive Behavior and Cigarette Smoking," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 722-742, August.
    2. Chaloupka, Frank J. & Warner, Kenneth E., 2000. "The economics of smoking," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 29, pages 1539-1627, Elsevier.
    3. Michael J. Moore & Philip J. Cook, 1995. "Habit and Heterogeneity in the Youthful Demand for Alcohol," NBER Working Papers 5152, National Bureau of Economic Research, Inc.
    4. Tekin, Erdal, 2002. "Employment, Wages, and Alcohol Consumption in Russia: Evidence from Panel Data," IZA Discussion Papers 432, Institute of Labor Economics (IZA).
    5. Peter Bardsley & Nilss Olekalns, 1999. "Cigarette and Tobacco Consumption: Have Anti‐Smoking Policies Made a Difference?," The Economic Record, The Economic Society of Australia, vol. 75(3), pages 225-240, September.
    6. Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
    7. K.E. Quek, 1988. "The Demand of Alcohol in Canada: An econometric study," Economics Discussion / Working Papers 88-08, The University of Western Australia, Department of Economics.
    8. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
    9. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 225-238.
    10. Kenneth W. Clements & Antony Selvanathan & Saroja Selvanathan, 1996. "Applied Demand Analysis: A Survey," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 63-81, March.
    11. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    12. Zarkin, Gary A. & French, Michael T. & Mroz, Thomas & Bray, Jeremy W., 1998. "Alcohol use and wages: New results from the national household survey on drug abuse," Journal of Health Economics, Elsevier, vol. 17(1), pages 53-68, January.
    13. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. 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.
    4. 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.
    5. Popov, Vladimir, 2009. "Mortality Crisis in Russia Revisited: Evidence from Cross-Regional Comparison," MPRA Paper 21311, University Library of Munich, Germany, revised Dec 2009.
    6. Evgeny Yakovlev, 2016. "Demand for Alcohol Consumption and Implication for Mortality: Evidence from Russia," Working Papers w0221, New Economic School (NES).
    7. Kolosnitsyna, Marina & Sukhanova, Varvara, 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.
    8. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrienko Yury & Nemtsov Aleksandr, 2005. "Estimation of individual demand for alcohol," EERC Working Paper Series 05-10e, EERC Research Network, Russia and CIS.
    2. D. Dragone & D. Raggi, 2018. "Testing Rational Addiction: When Lifetime is Uncertain, One Lag is Enough," Working Papers wp1119, Dipartimento Scienze Economiche, Universita' di Bologna.
    3. Silvia TIEZZI, 2010. "Addiction and Smoking Behaviour in Italy," EcoMod2004 330600141, EcoMod.
    4. Silvia Tiezzi, 2003. "Addiction and Smoking Behaviour in Italy," Department of Economics University of Siena 412, Department of Economics, University of Siena.
    5. Silvia Tiezzi, 2005. "An empirical analysis of tobacco addiction in Italy," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(3), pages 233-243, September.
    6. Sergi Jiménez-Martín & José M. Labeaga & Majid al Sadoon, 2020. "Consistent estimation of panel data sample selection models," Working Papers 2020-06, FEDEA.
    7. Hammar, Henrik & Carlsson, Fredrik, 2001. "Smokers' Decisions To Quit Smoking," Working Papers in Economics 59, University of Gothenburg, Department of Economics.
    8. Piccoli, Luca & Tiezzi, Silvia, 2021. "Rational addiction and time-consistency: An empirical test," Journal of Health Economics, Elsevier, vol. 80(C).
    9. Andrew M. Jones & Audrey Laporte & Nigel Rice & Eugenio Zucchelli, 2019. "Dynamic panel data estimation of an integrated Grossman and Becker–Murphy model of health and addiction," Empirical Economics, Springer, vol. 56(2), pages 703-733, February.
    10. Mark Coppejans & Donna Gilleskie & Holger Sieg & Koleman Strumpf, 2007. "Consumer Demand under Price Uncertainty: Empirical Evidence from the Market for Cigarettes," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 510-521, August.
    11. Ciccarelli, Carlo & Giamboni, Luigi & Waldmann, Robert, 2007. "Cigarette smoking, pregnancy, forward looking behavior and dynamic inconsistency," MPRA Paper 8878, University Library of Munich, Germany.
    12. Anne Bretteville-Jensen, 2006. "Drug Demand – Initiation, Continuation and Quitting," De Economist, Springer, vol. 154(4), pages 491-516, December.
    13. Jérôme Adda & Francesca Cornaglia, 2010. "The Effect of Bans and Taxes on Passive Smoking," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 1-32, January.
    14. Peter Arcidiacono & Holger Sieg & Frank Sloan, 2007. "Living Rationally Under The Volcano? An Empirical Analysis Of Heavy Drinking And Smoking," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(1), pages 37-65, February.
    15. Shao-Hsun Keng & Sheng-Jang Sheu, 2013. "The effect of stimulants and their combined use with cigarettes on mortality: the case of betel quid," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(4), pages 677-695, August.
    16. Ziggy MacDonald, 2004. "What Price Drug Use? The Contribution of Economics to an Evidence‐Based Drugs Policy," Journal of Economic Surveys, Wiley Blackwell, vol. 18(2), pages 113-152, April.
    17. repec:zbw:rwirep:0064 is not listed on IDEAS
    18. Robert Kaestner & Kevin Callison, 2018. "An Assessment of the Forward‐Looking Hypothesis of the Demand for Cigarettes," Southern Economic Journal, John Wiley & Sons, vol. 85(1), pages 48-70, July.
    19. Jonathan Gruber & Botond Köszegi, 2001. "Is Addiction "Rational"? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1261-1303.
    20. Sophie Massin, 2011. "La notion d'addiction en économie : La théorie du choix rationnel à l'épreuve," Revue d'économie politique, Dalloz, vol. 121(5), pages 713-750.
    21. Herzfeld, Thomas & Huffman, Sonya & Rizov, Marian, 2014. "The dynamics of food, alcohol and cigarette consumption in Russia during transition," Economics & Human Biology, Elsevier, vol. 13(C), pages 128-143.

    More about this item

    Keywords

    Alcohol; Demand; Russia;
    All these keywords.

    JEL classification:

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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cfr:cefirw:w0089. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Julia Babich (email available below). General contact details of provider: https://edirc.repec.org/data/cefirru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.