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Fewer Calories, More Drinkers: Did the Initial Ultra-Light Beers Attract New Drinkers?

Author

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  • Rhodes, M. Taylor

    (University of North Carolina at Greensboro, Department of Economics)

Abstract

This paper estimates the demand for beer in the U.S. from 2001 until 2006 using a multinomial logit discrete-choice model of product differentiation. Using grocery store scanner data from Information Resources Incorporated (IRI), demand estimates are used to evaluate the extent to which two new beer brandsMichelob Ultra and Bud Selectattracted new drinkers. The possible corresponding impacts on public welfare, with particular attention to the public health consequences of the over-consumption of alcohol, represent an unexplored aspect to the study of new brands. Counterfactual results based on a single market suggest that 68% of sales of Bud Select and 74% of sales of Michelob Ultra were due to new drinkers. Additionally, new drinkers of Bud Select seemed to prefer larger package sizes--specifically 12-packs over 6-packs--whereas the reverse held for Michelob Ultra.

Suggested Citation

  • Rhodes, M. Taylor, 2013. "Fewer Calories, More Drinkers: Did the Initial Ultra-Light Beers Attract New Drinkers?," UNCG Economics Working Papers 13-18, University of North Carolina at Greensboro, Department of Economics.
    • Handle: RePEc:ris:uncgec:2013_018
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    More about this item

    Keywords

    New brands; Alcohol consumption; Demand estimation; U.S. beer industry;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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