It is proposed to conduct an empirical investigation into the economic determinants of alcohol consumption by individuals. The primary source of data will be the Health Promotion/Disease Prevention Supplement to the 1985 Health Interview Survey. One major focus of the research will be on the relationship between alcohol consumption and the individual's knowledge of the associated adverse health effects. The second major focus will be on the effects of alcohol prices and availability on alcohol consumption. To accomplish the objectives, additional data sources will be merged with the Health Interview Survey data. An econometric model will be specified that will provide estimates of alcohol demand functions for the general population and for various sub-groups including youths, females, and minorities. Using the estimated demand functions,k it will be possible to compare the effectiveness of alternative policy approaches to the control and prevention of alcohol abuse. One approach is to emphasize public and private program interventions to improve consumer health knowledge. A second approach is to rely on economic policy instruments, such as taxes on alcoholic beverages, to decrease alcohol consumption. Using the results of the proposed study, the estimated effects of the economic policy variables on alcohol consumption will be compared to the estimated effect of health knowledge. The study will investigate if knowledge alone acts as a determinant of alcohol consumption, or has stronger effects in interaction with other influences. The comparisons will be made for the general population and the sub-groups, and in terms of the effects on heavy alcohol consumption as opposed to light or moderate consumption. The proposed study will make the same comparisons for the effects of advertising on consumption.
