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Is Heavy Drinking Always Profitable For Alcohol Industry? An Epidemic Framework For Alcohol Consumption
[Le binge drinking est-il toujours profitable à l’industrie alcoolière ? Un modèle épidémique de la consommation d’alcool]

Author

Listed:
  • Miléna Spach

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Antoine Pietri

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article aims to provide a better understanding of the impact of heavy drinkers on the alcohol industry s profitability. At first glance, heavy drinking appears to improve alcohol s sales leading to an increase of profit. However, heavy drinking also involves fatal injuries and constitutes a shortfall for the industry. In this paper, we explore coexistence of these two forces through an epidemic model of alcohol use distinguishing light and heavy drinkers (LH model). We find that there exists a level of alcohol consumption beyond which heavy drinkers represent a loss of profit for the alcohol industry. We calibrate our model with U.S. data for 2011 and we estimate that this threshold should be between 10.22 and 10.80 drinks per heavy drinking occasion. The implication of our result is twofold: the alcohol industry should set up more effective actions against the heaviest consumers, and consequently genuine collaborations with public authorities could exist for this fringe of population.

Suggested Citation

  • Miléna Spach & Antoine Pietri, 2018. "Is Heavy Drinking Always Profitable For Alcohol Industry? An Epidemic Framework For Alcohol Consumption [Le binge drinking est-il toujours profitable à l’industrie alcoolière ? Un modèle épidémique," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-02867917, HAL.
    • Handle: RePEc:hal:cesptp:hal-02867917
    Note: View the original document on HAL open archive server: https://hal.science/hal-02867917
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    References listed on IDEAS

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