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Would a rational underage binge-drink?

This paper provides a utility-based definition of binge drinking and examines the compatibility of this phenomenon with rational decision making. Prohibition of young people’s consumption of alcohol is frequently violated with binge-drinking in groups. The analysis considers the roles of peer-pressure, full price of alcohol and crowding in underage group-drinking sessions and identifies the conditions for binge-drinking by expected utility maximizing members. Rational binge-drinking occurs when the impact of the peer-pressure on the individual member’s utility exceeds the loss of utility from the forgone spending on all other goods associated with the expected full marginal cost of consuming alcohol.

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File URL: http://business.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow158369.pdf
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Paper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp13-03.

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Length: 23 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:uow:depec1:wp13-03
Contact details of provider: Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
Phone: +612 4221-3659
Fax: +612 4221-3725
Web page: http://business.uow.edu.au/econ/index.html

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