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Individual Heterogeneity in Alcohol Consumption: The Case of Beer, Wine and Spirits in Australia

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  • PREETY RAMFUL
  • XUEYAN ZHAO

Abstract

This paper examines the effects of socioeconomic and demographic factors on Australian individuals’ participation in beer, wine and spirits consumption using unit‐record data during 1991–2001. A trivariate probit formulation allows for participation in the three alcoholic beverages to be modelled jointly accounting for correlation via unobserved personal characteristics. Own and cross price elasticities are estimated for both unconditional and conditional participation probabilities. While the three beverages are commonly considered closely related economic goods, we find that they relate to rather heterogenous population groups and the correlations via the unobservable characteristics are low in magnitude.

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  • Preety Ramful & Xueyan Zhao, 2008. "Individual Heterogeneity in Alcohol Consumption: The Case of Beer, Wine and Spirits in Australia," The Economic Record, The Economic Society of Australia, vol. 84(265), pages 207-222, June.
    • Handle: RePEc:bla:ecorec:v:84:y:2008:i:265:p:207-222
    DOI: 10.1111/j.1475-4932.2008.00463.x
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    References listed on IDEAS

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    1. Clements, Kenneth W & Johnson, Lester W, 1983. "The Demand for Beer, Wine, and Spirits: A Systemwide Analysis," The Journal of Business, University of Chicago Press, vol. 56(3), pages 273-304, July.
    2. Xueyan Zhao & Mark N. Harris, 2004. "Demand for Marijuana, Alcohol and Tobacco: Participation, Levels of Consumption and Cross‐equation Correlations," The Economic Record, The Economic Society of Australia, vol. 80(251), pages 394-410, December.
    3. Kenneth Clements & Wana Yang & Simon Zheng, 1997. "Is utility additive? The case of alcohol," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1163-1167.
    4. Preety Ramful & Xueyan Zhao, 2009. "Participation in marijuana, cocaine and heroin consumption in Australia: a multivariate probit approach," Applied Economics, Taylor & Francis Journals, vol. 41(4), pages 481-496.
    5. Harris, Mark N. & Ramful, Preety & Zhao, Xueyan, 2006. "An ordered generalised extreme value model with application to alcohol consumption in Australia," Journal of Health Economics, Elsevier, vol. 25(4), pages 782-801, July.
    6. Lisa Cameron & Jenny Williams, 2001. "Cannabis, Alcohol and Cigarettes: Substitutes or Complements?," The Economic Record, The Economic Society of Australia, vol. 77(236), pages 19-34, March.
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    Cited by:

    1. Rickard, Bradley J. & Gergaud, Olivier & Ho, Shuay-Tsyr & Hu, Wenjing, 2014. "Trade Liberalization In The Presence Of Domestic Regulations: Impacts Of The Proposed Eu-U.S. Free Trade Agreement On Wine Markets," Working Papers 190670, American Association of Wine Economists.
    2. Preety Srivastava & Ou Yang & Xueyan Zhao, 2022. "Equal Tax for Equal Alcohol? Beverage Types and Antisocial and Unlawful Behaviours," The Economic Record, The Economic Society of Australia, vol. 98(323), pages 354-372, December.
    3. Andrew Tan & Steven Yen & Rodolfo Nayga, 2009. "Factors Affecting Alcohol Purchase Decisions and Expenditures: A Sample Selection Analysis by Ethnicity in Malaysia," Journal of Family and Economic Issues, Springer, vol. 30(2), pages 149-159, June.
    4. Preety Srivastava & Keith R. McLaren & Michael Wohlgenant & Xueyan Zhao, 2014. "Econometric Modelling of Price Response by Alcohol Types to Inform Alcohol Tax Policies," Monash Econometrics and Business Statistics Working Papers 5/14, Monash University, Department of Econometrics and Business Statistics.
    5. Preety Srivastava & Xueyan Zhao, 2010. "What Do the Bingers Drink? Micro‐Unit Evidence on Negative Externalities and Drinker Characteristics of Alcohol Consumption by Beverage Types," Economic Papers, The Economic Society of Australia, vol. 29(2), pages 229-250, June.
    6. John Freebairn, 2010. "Special Taxation of Alcoholic Beverages to Correct Market Failures," Economic Papers, The Economic Society of Australia, vol. 29(2), pages 200-214, June.
    7. Lee, Suin & Pantzalis, Christos & Park, Jung Chul, 2019. "Does local culture trigger speculative investment behavior?," Journal of Business Research, Elsevier, vol. 103(C), pages 71-88.
    8. Ou Yang & Xueyan Zhao & Preety Srivastava, 2015. "Binge Drinking, Antisocial and Unlawful Behaviours, and Beverage Types," Melbourne Institute Working Paper Series wp2015n03, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    9. Preety Srivastava & Xueyan Zhao, 2010. "What Do the Bingers Drink? Microeconometric Evidence on Negative Externatilities of Alcohol Consumption by Beverage Types," Monash Econometrics and Business Statistics Working Papers 1/10, Monash University, Department of Econometrics and Business Statistics.
    10. Ou Yang & Xueyan Zhao & Preety Srivastava, 2016. "Binge Drinking and Antisocial and Unlawful Behaviours in Australia," The Economic Record, The Economic Society of Australia, vol. 92(297), pages 222-240, June.
    11. Yen, Steven T. & Yuan, Yan & Liu, Xiaowen, 2009. "Alcohol consumption by men in China: A non-Gaussian censored system approach," China Economic Review, Elsevier, vol. 20(2), pages 162-173, June.
    12. de Walque, Damien, 2020. "The use of financial incentives to prevent unhealthy behaviors: A review," Social Science & Medicine, Elsevier, vol. 261(C).
    13. Tanja Laković & Ana Mugoša & Mirjana Čizmović & Gordana Radojević, 2019. "Impact of Taxation Policy on Household Spirit Consumption and Public-Finance Sustainability," Sustainability, MDPI, vol. 11(20), pages 1-15, October.
    14. Anh, Nguyen Tuan & Gan, Christopher & Anh, Dao Le Trang, 2022. "Multi-market credit rationing: The determinants of and impacts on farm performance in Vietnam," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 159-173.

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