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Alcohol Advertising and Alcohol Consumption by Adolescents

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  • Henry Saffer
  • Dhaval Dave

Abstract

The purpose of this paper is to empirically estimate the effects of alcohol advertising on adolescent alcohol consumption. The theory of brand capital is used to explain the effects of advertising on consumption. The industry response function and the evidence from prior studies indicate that the empirical strategy should maximize the variance in the advertising data. The approach in this paper to maximizing the variance in advertising data is to employ cross sectional data. The Monitoring the Future (MTF) and the National Longitudinal Survey of Youth 1997 (NLSY97) data sets, which include only data for adolescents, are employed for the empirical work. These data sets are augmented with alcohol advertising data, originating on the market level, for five media. Use of both the MTF and the NLSY97 data sets improves the empirical analysis since each data set has its own unique advantages. The large size of the MTF makes it possible to estimate regressions with race and gender specific subsamples. The panel nature of the NLSY97 makes it possible to estimate individual fixed effects models. In addition, very similar models can be estimated with both data sets. Since the data sets are independent, the basically consistent findings increase the confidence in all the results. The results indicate that blacks participate in alcohol less than whites and their participation cannot be explained with the included variables as well as it can for whites. A comparison of male and female regressions shows that price and advertising effects are generally larger for females. Models which control for individual heterogeneity result in larger advertising effects implying that the MTF results may understate the effect of alcohol advertising. The results based on the NLSY97 suggest that a compete ban on all alcohol advertising could reduce adolescent monthly alcohol participation by about 24 percent and binge participation by about 42 percent. The past month price-participation elasticity was estimated at about -0.28 and the price-binge participation elasticity was estimated at about -0.51. Both advertising and price policies are shown to have the potential to substantially reduce adolescent alcohol consumption.

Suggested Citation

  • Henry Saffer & Dhaval Dave, 2003. "Alcohol Advertising and Alcohol Consumption by Adolescents," NBER Working Papers 9676, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9676
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Henry Saffer & Dhaval Dave, 2002. "Alcohol consumption and alcohol advertising bans," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1325-1334.
    3. Cook, Philip J. & Moore, Michael J., 2000. "Alcohol," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 30, pages 1629-1673 Elsevier.
    4. Dave, Dhaval & Saffer, Henry, 2013. "Demand for smokeless tobacco: Role of advertising," Journal of Health Economics, Elsevier, vol. 32(4), pages 682-697.
    5. Michael Siegel & Charles King & Joshua Ostroff & Craig Ross & Karen Dixon & David H. Jernigan, 2008. "Comment-Alcohol Advertising In Magazines And Youth Readership: Are Youths Disproportionately Exposed?," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 482-492, July.
    6. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
    7. Chung Jinhwa & Joo Hailey Hayeon & Moon Seongman, 2014. "Designated Driver Service Availability and Its Effects on Drunk Driving Behaviors," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(4), pages 1-25, October.
    8. Pierre Pestieau & Gregory Ponthiere, 2012. "Myopia, regrets, and risky behaviors," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(2), pages 288-317, April.
    9. Shin-Yi Chou & Inas Rashad & Michael Grossman, 2008. "Fast-Food Restaurant Advertising on Television and Its Influence on Childhood Obesity," Journal of Law and Economics, University of Chicago Press, vol. 51(4), pages 599-618, November.
    10. Jon P. Nelson, 2008. "Reply To Siegel Et Al.: Alcohol Advertising In Magazines And Disproportionate Exposure," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 493-504, July.
    11. Sen, Bisakha, 2009. "The relationship between frequency of family dinner and adolescent problem behaviors after adjusting for other family characteristics," MPRA Paper 24329, University Library of Munich, Germany.
    12. Niko de Silva & Benno Torgler, 2011. "Smoke Signals and Mixed Messages: Medical Marijuana & Drug Policy Signalling Effects," CREMA Working Paper Series 2011-18, Center for Research in Economics, Management and the Arts (CREMA).
    13. Zimmerman, Paul R. & Benson, Bruce L., 2007. "Alcohol and rape: An "economics-of-crime" perspective," International Review of Law and Economics, Elsevier, vol. 27(4), pages 442-473, December.
    14. Ligeon, Carel & Gregorowicz, Philip & Jolly, Curtis M., 2007. "Factors Influencing Alcohol Consumption In Caribbean And Latin American Countries," 2006 West Indies Agricultural Economics Conference, July 2006, San Juan, Puerto Rico 36956, Caribbean Agro-Economic Society.
    15. Henry Saffer & Frank Chaloupka, 1999. "Tobacco Advertising: Economic Theory and International Evidence," NBER Working Papers 6958, National Bureau of Economic Research, Inc.
    16. Mullins, Michelle & Milyo, Jeffrey & Sykuta, Michael E., 2006. "Regulating for Public Health: Motivations for and Efficacy of State Alcohol Regulations," 2006 Annual meeting, July 23-26, Long Beach, CA 21176, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Harry Clarke, 2008. "The Economist’s Way of Thinking About Alcohol Policy," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(2), pages 27-44.
    18. Dave, Dhaval & Saffer, Henry, 2008. "Alcohol demand and risk preference," Journal of Economic Psychology, Elsevier, vol. 29(6), pages 810-831, December.
    19. Nelson, Jon P., 2001. "Alcohol Advertising and Advertising Bans: A Survey of Research Methods, Results, and Policy Implications," Working Papers 7-01-2, Pennsylvania State University, Department of Economics.

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    • I1 - Health, Education, and Welfare - - Health

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