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The Own-Price Elasticity of Alcohol: A Meta-Analysis

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  • James Fogarty

    (UWA Business School, The University of Western Australia)

Abstract

Interpreting the own-price elasticity of demand for alcohol literature is difficult. While numerous studies have been conducted, the point estimates reported vary dramatically. Some studies suggest the demand for alcohol is price inelastic, others suggest it is price elastic. This paper presents an empirical synthesis of own-price elasticity of demand for alcohol estimates using the technique of meta-regression analysis. 150 point estimates, drawn from studies covering 18 different countries are considered. The results of the empirical work reported in this paper suggest: the year of the study, the length of study, the per capita level of alcohol consumption, and the relative ethanol share of a beverage are important factors when explaining variations in estimates of the own-price elasticity of demand for alcohol. Interestingly, the study also suggests country specific and beverage specific effects are not statistically significant.

Suggested Citation

  • James Fogarty, 2004. "The Own-Price Elasticity of Alcohol: A Meta-Analysis," Economics Discussion / Working Papers 04-01, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:04-01
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    Cited by:

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    2. 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), pages 1-15.
    3. Benjamin Volland, 2013. "The History of an Inferior Good: Beer Consumption in Germany," Papers on Economics and Evolution 2012-19, Philipps University Marburg, Department of Geography.
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    5. Todd C. Neumann, 2013. "The effect of drinking and smoking on the labour market outcomes of low-income young adults," Applied Economics, Taylor & Francis Journals, vol. 45(5), pages 541-553, February.

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