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Habit formation and college students' demand for alcohol

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  • Jenny Williams

Abstract

This research investigates whether the positive association between college students' current and high‐school drinking is due to habit formation or whether it is solely due to the influence of unobserved individual characteristics that are correlated over time. The empirical investigation is based on individual level data from the 1997 and 1999 waves of the Harvard School of Public Health's College Alcohol Study (CAS). Amemyia's generalized least squares is used to address the heterogeneity issue in examining the relationship between past and current drinking. The results suggest that after controlling for correlation in unobserved characteristics that influence alcohol use, high‐school drinking has a significant and positive impact on college drinking, indicating the existence of habit formation. Both structural evidence of habit formation and reduced form results reveal that stricter drunk driving laws faced while in high‐school have a long lived effect, reducing drinking while in college. The results also highlight the importance of access to alcohol, both on campus and in the college neighborhood, as a determinant of college students' drinking behavior. Copyright © 2004 John Wiley & Sons, Ltd.

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  • Jenny Williams, 2005. "Habit formation and college students' demand for alcohol," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 119-134, February.
    • Handle: RePEc:wly:hlthec:v:14:y:2005:i:2:p:119-134
    DOI: 10.1002/hec.908
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    Cited by:

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    2. Lan Liang & Jidong Huang, 2008. "Go out or stay in? The effects of zero tolerance laws on alcohol use and drinking and driving patterns among college students," Health Economics, John Wiley & Sons, Ltd., vol. 17(11), pages 1261-1275.
    3. Rinaldo Brau & Marco Nieddu & S. Balia, 2021. "Depowering Risk: Vehicle Power Restriction and Teen Driver Accidents in Italy," Working Paper CRENoS 202101, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    4. Li, Wenying & Dorfman, Jeffrey H., 2018. "Habit Formation with Smooth Transitions: Estimating Demand for U.S. Carbonated-Sweetened Beverages and Beer," 2018 Annual Meeting, August 5-7, Washington, D.C. 273852, Agricultural and Applied Economics Association.
    5. Lorenz Kueng & Evgeny Yakovlev, 2016. "Long-Run Effects of Public Policies: Endogenous Alcohol Preferences and Life Expectancy in Russia," Working Papers w0219, New Economic School (NES).
    6. Thomas Demuynck & Ewout Verriest, 2013. "I’Ll Never Forget My First Cigarette: A Revealed Preference Analysis Of The “Habits As Durables” Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(2), pages 717-738, May.
    7. 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.
    8. Manu Raghav & Timothy M. Diette, 2022. "Greek myth or fact? The role of Greek houses in alcohol and drug violations on American campuses," Applied Economics, Taylor & Francis Journals, vol. 54(55), pages 6406-6417, November.
    9. Michael T. French & Ioana Popovici, 2011. "That instrument is lousy! In search of agreement when using instrumental variables estimation in substance use research," Health Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 127-146, February.
    10. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
    11. Irina Grafova, 2007. "Your Money or Your Life: Managing Health, Managing Money," Journal of Family and Economic Issues, Springer, vol. 28(2), pages 285-303, June.
    12. 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.
    13. Lan Liang & Jidong Huang, 2008. "Go out or stay in? The effects of zero tolerance laws on alcohol use and drinking and driving patterns among college students," Health Economics, John Wiley & Sons, Ltd., vol. 17(11), pages 1261-1275, November.
    14. Jason Fletcher, 2012. "Peer influences on adolescent alcohol consumption: evidence using an instrumental variables/fixed effect approach," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1265-1286, October.

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