Cross-country alcohol consumption comparison: an application of the Rotterdam demand system

Abstract

and the US, using the Rotterdam demand system. A crosscountry comparison of the results shows that in most countries (i) wine consumption has grown at a faster rate than l::eer and spirits; (ii) the proportion of consumers' expenditure on alcohol is declining; (iii) beer is a necessity and spirits is a luxury; (iv) the demand for the three beverages is price inelastic; and (iv) all three beverages are pair-wise substitutes. We also investigated the hypothesis of identical parameters for all countries by pooling the data across countries and found that the data do not support the hypothesis.

Cross-section estimation of US demand for alcoholic beverage

“…These include Clements and Johnson (1983), Thom (1984, for Ireland), Uri (1986). Selvanathan (1987, 1991), Duffy (1987), Penm (1988), Selvanathan (1988Selvanathan ( , 1989Selvanathan ( , 1991, Heien and Pompelli (1989), Jones (1989a) and Tegene (1990). Selvanathan (1991) reviewed some of these studies.…”

The Role of Advertising on Attitudes and Consumption of Food and Beverage Products

“…Johnson ( 1986 ) found that beer and wine advertising had signi fi cant association with both beer and wine demand but that spirits advertising had no effect on spirits demand. Selvanathan ( 1991 ) found that beer advertising had a signi fi cant association with beer, wine, and spirits demand and that wine and spirits advertising reduced the demand for beer. Blake and Nied ( 1997 ) noted that alcohol advertising had weak effects in their study of demand in the UK market from 1952 to 1991.…”

Effects of economic factors on alcohol consumption in 14 European countries

“…The price and expenditure elasticities are estimated separately for each country. In contrast to Selvanathan (1991), we have not used a system of demand equations for separate beverage groups, but instead estimate a single demand function for alcoholic beverages. This was done because we could not obtain index data in the detail needed.…”

“…Holm & Suoniemi 1992;Leppänen 1999;Strand 1993;Berggren 1997;Jones 1989;Selvanathan 1988;Selvanathan 1991). Most of the studies consider demand for alcoholic beverages, usually divided into subgroups such as spirits, wine and beer, using time series data for a single country.…”

“…The effects of the prices and incomes (total expenditure) on consumption are measured by elasticities, which show a per cent change in consumption following a per cent change in prices or incomes (total expenditure). Selvanathan (1991) made a comprehensive study by examining a system of demand equations using time series data in nine countries, including Finland, Norway, Sweden and the United Kingdom. Demand equations for spirits, beer and wine were estimated in terms of alcohol consumption in litres per adult.…”