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Further evidence about alcohol consumption and the business cycle

  • C. Vilaplana
  • José M. Labeaga
  • S. Jiménez-Martín

The main goal of this paper is to test whether macroeconomic conditions a¤ect alcohol consumption using data from the Behavioral Risk Factor Surveillance System for the period 1987-2003. We try to control unobserved heterogeneity by relying on the construction of pseudo-panel data from the different cross-sections available. Our results indicate that when we do not take into account unobserved heterogeneity, the unemployment rate is signifficant and reduces the probability of becoming drinker and the number of alcoholic beverages consumed. However, once we estimate the model using cohort data, controlling for both observed and unobserved heterogeneity, the unemployment rate becomes non-signifficant. This implies that unobserved effects are important when explaining alcohol consumption. As a result, inferences obtained without controlling for them should be interpreted with caution.

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File URL: http://documentos.fedea.net/pubs/dt/2006/dt-2006-06.pdf
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Paper provided by FEDEA in its series Working Papers with number 2006-06.

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Date of creation: Apr 2006
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Handle: RePEc:fda:fdaddt:2006-06
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  17. Wagstaff, Adam, 1985. "Time series analysis of the relationship between unemployment and mortality: A survey of econometric critiques and replications of Brenner's studies," Social Science & Medicine, Elsevier, vol. 21(9), pages 985-996, January.
  18. Mullahy, John & Sindelar, Jody L, 1991. "Gender Differences in Labor Market Effects of Alcoholism," American Economic Review, American Economic Association, vol. 81(2), pages 161-65, May.
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