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Would a rational underage binge-drink?

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Abstract

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.

Suggested Citation

  • Amnon Levy, 2013. "Would a rational underage binge-drink?," Economics Working Papers wp13-03, School of Economics, University of Wollongong, NSW, Australia.
  • Handle: RePEc:uow:depec1:wp13-03
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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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    More about this item

    Keywords

    Alcohol; Minimum Age; Peer Pressure; Rationality; Binge Drinking;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior

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