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Re-examining the economic determinants of alcohol consumption in Canada: controlling for the presence of common correlated effects

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  • Jason Stevens
  • Jason Childs

Abstract

Alcoholic beverages represent both an important source of revenue and a driver of expenditure for provincial governments in Canada. As a result, the pricing of alcoholic beverages has substantial public policy implications. In this context, we re-examine existing work estimating the demand for three classes of alcoholic beverage (beer, wine, and spirits) by controlling for common correlated effects. The results reveal that any conclusions regarding the government’s ability to influence alcohol consumption is sensitive to the assumption that the relationship between the demand for alcoholic beverages and economic variables is identical across provinces.

Suggested Citation

  • Jason Stevens & Jason Childs, 2017. "Re-examining the economic determinants of alcohol consumption in Canada: controlling for the presence of common correlated effects," Applied Economics Letters, Taylor & Francis Journals, vol. 24(16), pages 1177-1180, September.
  • Handle: RePEc:taf:apeclt:v:24:y:2017:i:16:p:1177-1180
    DOI: 10.1080/13504851.2016.1265065
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