The History of an Inferior Good: Beer Consumption in Germany
The question whether alcohol in general, and different types of alcoholic beverages in particular (e.g., beer) are normal or inferior goods is a heavily disputed issue within economics and health research. Based on recently developed theories of preference adjustment this paper argues that the answer to this question may not be independent of the level of income itself. It therefore applies a gradual switching regression approach to aggregate beer consumption data in Germany from 1957 to 2007. This method allows elasticities to change over time, without prior specifications of the time and speed of adjustments. Results suggest that an important behavioral change is present in the data, as elasticities of beer demand shifted considerably between 1965 and 2004. In particular, they demonstrate that over this period beer shifted from being a normal to being an inferior good.
|Date of creation:||31 Jan 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Deutschhausstrasse 10, 35032 Marburg|
Web page: http://www.uni-marburg.de/fb19/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven N. Durlauf & Peter C.B. Phillips, 1986.
"Trends Versus Random Walks in Time Series Analysis,"
Cowles Foundation Discussion Papers
788, Cowles Foundation for Research in Economics, Yale University.
- Durlauf, Steven N & Phillips, Peter C B, 1988. "Trends versus Random Walks in Time Series Analysis," Econometrica, Econometric Society, vol. 56(6), pages 1333-54, November.
- Donald G. Freeman, 2000. "Alternative Panel Estimates of Alcohol Demand, Taxation, and the Business Cycle," Southern Economic Journal, Southern Economic Association, vol. 67(2), pages 325-344, July.
- James Fogarty, 2004. "The Own-Price Elasticity of Alcohol: A Meta-Analysis," Economics Discussion / Working Papers 04-01, The University of Western Australia, Department of Economics.
- Jon Nelson, 2003. "Advertising Bans, Monopoly, and Alcohol Demand: Testing for Substitution Effects using State Panel Data," Review of Industrial Organization, Springer, vol. 22(1), pages 1-25, February.
- Schneider, Lynne & Klein, Benjamin & Murphy, Kevin M, 1981.
"Governmental Regulation of Cigarette Health Information,"
Journal of Law and Economics,
University of Chicago Press, vol. 24(3), pages 575-612, December.
- Benjamin Klein & Kevin M. Murphy & Lynne Schneider, 1981. "Governmental REgualtion of Cigarette Health Information," UCLA Economics Working Papers 200, UCLA Department of Economics.
- Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
- Freeman, Donald G., 1999. "A note on 'Economic conditions and alcohol problems'," Journal of Health Economics, Elsevier, vol. 18(5), pages 659-668, October.
- Alexander Konnopka & Hans-Helmut König, 2007. "Direct and Indirect Costs Attributable to Alcohol Consumption in Germany," PharmacoEconomics, Springer, vol. 25(7), pages 605-618, July.
- Bratina Danijel & Faganel Armand, 2008. "Forecasting the Primary Demand for a Beer Brand Using Time Series Analysis," Organizacija, De Gruyter Open, vol. 41(3), pages 116-124, May.
- Kiminori Matsuyama, 2000.
"The Rise of Mass Consumption Societies,"
STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers
23, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Kiminori Matsuyama, 2000. "The rise of mass consumption societies," LSE Research Online Documents on Economics 6656, London School of Economics and Political Science, LSE Library.
- Kiminori Matsuyama, 1999. "The Rise of Mass Consumption Societies," Discussion Papers 1289, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Kenneth Clements & Wana Yang & Simon Zheng, 1997.
"Is utility additive? The case of alcohol,"
Taylor & Francis Journals, vol. 29(9), pages 1163-1167.
- Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June.
- Wilhelm Ruprecht, 2005. "The historical development of the consumption of sweeteners - a learning approach," Journal of Evolutionary Economics, Springer, vol. 15(3), pages 247-272, 08.
- Saroja Selvanathan & Eliyathamby Selvanathan, 2007. "Another look at the identical tastes hypothesis on the analysis of cross-country alcohol data," Empirical Economics, Springer, vol. 32(1), pages 185-215, April.
- Jon Nelson, 2010. "Alcohol advertising bans, consumption and control policies in seventeen OECD countries, 1975-2000," Applied Economics, Taylor & Francis Journals, vol. 42(7), pages 803-823.
- Craig A. Gallet, 2007.
"The demand for alcohol: a meta-analysis of elasticities,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 51(2), pages 121-135, 06.
- Gallet, Craig A., 2007. "The demand for alcohol: a meta-analysis of elasticities," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), June.
- Viscusi, W Kip & Evans, William N, 1990. "Utility Functions That Depend on Health Status: Estimates and Economic Implications," American Economic Review, American Economic Association, vol. 80(3), pages 353-74, June.
- Saroja Selvanathan, 2006. "How similar are alcohol drinkers? International evidence," Applied Economics, Taylor & Francis Journals, vol. 38(12), pages 1353-1362.
- E. A. Selvanathan & S. Selvanathan, 2004. "Economic and demographic factors in Australian alcohol demand," Applied Economics, Taylor & Francis Journals, vol. 36(21), pages 2405-2417.
- Gallet, Craig A. & List, John A., 1998. "Elasticities of beer demand revisited," Economics Letters, Elsevier, vol. 61(1), pages 67-71, October.
- S. Selvanathan & E.A. Selvanathan, 2005. "Empirical Regularities in Cross-Country Alcohol Consumption," The Economic Record, The Economic Society of Australia, vol. 81(s1), pages S128-S142, 08.
- Ulrich Witt, 2001. "special issue: Learning to consume - A theory of wants and the growth of demand," Journal of Evolutionary Economics, Springer, vol. 11(1), pages 23-36.
- Ohtani, Kazuhiro & Kakimoto, Sumio & Abe, Kenzo, 1990. "A gradual switching regression model with a flexible transition path," Economics Letters, Elsevier, vol. 32(1), pages 43-48, January.
- Joni Hersch & W. Kip Viscusi, 1990. "Cigarette Smoking, Seatbelt Use, and Differences in Wage-Risk Tradeoffs," Journal of Human Resources, University of Wisconsin Press, vol. 25(2), pages 202-227.
- Brenner, M. Harvey & Mooney, Anne, 1983. "Unemployment and health in the context of economic change," Social Science & Medicine, Elsevier, vol. 17(16), pages 1125-1138, January.
- Craig Gallet, 1999. "Gradual switching regression estimates of alcohol demand elasticities," Applied Economics Letters, Taylor & Francis Journals, vol. 6(6), pages 377-379.
When requesting a correction, please mention this item's handle: RePEc:esi:evopap:2012-19. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christoph Mengs)The email address of this maintainer does not seem to be valid anymore. Please ask Christoph Mengs to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.