The specific aims of this project are to refine and enrich the empirical literature dealing with the sensitivity of alcohol consumption and excessive consumption to differences in the prices of alcoholic beverages. The main refinement pertains to the incorporation of insights provided by a rational economic model of addictive behavior, which emphasized the dependency of current consumption of an addictive good on past consumption and future consumption of that good. The second refinement is a replication of previous research on the price sensitivity of youth alcohol use with data for the 1980s. The third refinement is the estimation of demand functions for distilled spirits, beer, and wine with a focus on cross-substitution effects. Five data sets will be employed in the project: a time series of state cross sections for the years 1962 through 1989; the National Health and Nutrition Examination Survey I Followup (NHANESIF); the 1982 and 1989 surveys of high school seniors conducted by the University of Michigan's Institute for Social Research as part of a national research program entitled """"""""Monitoring the Future;"""""""" and the followup panel studies of the original high school seniors in the Michigan surveys that have been conducted annually beginning with the class of 1976. Outcomes include alcohol use (not beverage-specific) in the micro panel data and beverage-specific alcohol consumption and liver cirrhosis mortality in the state data.
The aims will be addressed by estimating demand functions for these outcomes using a variety of multivariate techniques. Some specific questions that will be addressed include: Are alcohol consumption and excessive consumption addictive behaviors? Do drinkers behave myopically or rationally? How responsive are various measures of alcohol consumption to differences in the prices of alcoholic beverages? What do these estimates suggest about the magnitude of the responses of consumption to changes in Federal excise tax rates on alcoholic beverages? Are the effects limited to infrequent drinkers, or as the addictive model suggests, do heavy drinkers respond more to price changes in the long run than light drinkers? Is youth alcohol use in the 1980s as sensitive to price as published studies, which use date for the 1970s, suggest?
| Chaloupka, Frank J; Grossman, Michael; Saffer, Henry (2002) The effects of price on alcohol consumption and alcohol-related problems. Alcohol Res Health 26:22-34 |
