Advertising Expenditures and the Consumption of Alcoholic Beverages

PurposeThe purpose of this paper is to present a review of the literature on alcohol consumption, the externality cost of alcohol consumption, and the effectiveness of policy options.Design/methodology/approachEvidence on the cost to society of alcohol consumption, the amount of excise tax collected, the demand response of consumers, and the effectiveness of alcohol‐control policies is reviewed.FindingsAlcohol excise taxes generally, but not everywhere, fail to recover the externality costs placed on society that arise from alcohol consumption. Where externality costs are greater than excise revenue higher excise taxes are one effective and appropriate policy response. Complementary policies to higher excise taxes are likely to include: the provision of more information about harmful effects to consumers, especially the young; greater enforcement of drunk‐driving laws and zero tolerance drunk‐driving laws for young drivers. Restrictions on the opening hours of late night venues may have a modest impact on reducing costs, while advertising restrictions are unlikely to be effective.Originality/valueTypically. articles on alcohol consider a single issue. This review paper brings together information from both the health stream of alcohol studies and the economics stream of alcohol studies and provides a useful survey and synthesis of the literature.

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The Demand for Beer, Wine and Spirits: A Survey of the Literature

Fogarty

2010

Journal of Economic Surveys

125

123

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The demand for alcohol literature is vast and much conflicting information about the nature of the demand for alcoholic beverages has been published. This paper presents a survey of the literature, and then uses the technique of meta-regression analysis to establish insights into the nature of the demand for beer, wine and spirits. Unlike previous meta-studies of the demand for alcoholic beverages this study adjusts for the precision of each elasticity estimate. The analysis presented suggests reported elasticity estimates will be influenced by such factors as estimation technique, data frequency and time period under consideration. With respect to time, the findings suggest that the demand for alcoholic beverages has become less inelastic since the mid-1950s and that the income elasticity has been falling since the mid-1960s. The analysis also found support for the idea that alcohol as a commodity group is a necessity, and that consumers respond to price discounting with inventory behaviour rather than true substitution behaviour. Little support is found for the idea that the demand for alcoholic beverages varies fundamentally across most countries, although wine may be an exception.

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Advertising Expenditures and the Consumption of Alcoholic Beverages

Cited by 3 publications

References 20 publications

The Global Demand for Alcoholic Beverages, 2010–2015: Price and Expenditure Elasticities

The Global Demand for Alcoholic Beverages, 2010–2015: Price and Expenditure Elasticities

A review of alcohol consumption and alcohol control policies

The Demand for Beer, Wine and Spirits: A Survey of the Literature

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