Rational Addiction to Caffeine: An Analysis of Coffee Consumption

Olekalns, Nilss; Bardsley, Peter

doi:10.1086/262054

Cited by 95 publications

(52 citation statements)

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“…Evidently, competition in the coffee market keeps the elasticity well below 1, which is the minimum we would expect with perfect collusion among the roasters. The finding of low price elasticity is consistent with studies on coffee demand in other countries, such as Bettendorf and Verboven, (2000) for the Netherlands, Feuerstein (2002) for West Germany, and and Olekalns and Bardsley (1996) for the US.…”

supporting

confidence: 88%

Demand for coffee in Sweden: The role of prices, preferences and market power

Durevall

2007

Food Policy

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There is a widespread belief that consumer coffee prices are high relative to bean prices and that lower consumer prices would lead to substantial increases in bean exports from Third-World countries. This issue is evaluated by analysing how retail prices, preferences and market power influence coffee demand in Sweden. A demand function is estimated for the period 1968-2002 and used, together with information on import prices of coffee beans, to simulate an oligopoly model. This approach gives estimates of the maximum average degree of market power and shows how coffee demand would react to reductions in marginal cost to its minimum level. The maximum level of market power is found to be low, but it generates large spreads between consumer and bean prices because the price elasticity has low absolute values. Moreover, the impact of a price decrease would be small because long-run coffee demand is dominated by changes in the population structure in combination with different preferences across age groups. Hence, a change to perfect competition would only have a negligible effect on bean imports.

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supporting

confidence: 88%

Demand for coffee in Sweden: The role of prices, preferences and market power

Durevall

2007

Food Policy

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“…The Becker and Murphy [3] theory has been applied to the consumption of cigarettes, see Chaloupka [8], Becker, Grossman and Murphy [9], Labeaga [10,11], Baltagi and Gri¢ n [12], Gruber and Köszegi [7] and Jones and Labeaga [13]; to the consumption of alcohol, see Grossman, Chaloupka and Sirtalan [14] and Baltagi and Gri¢ n [15]; to the consumption of ca¤eine, see Olekalns and Bardsley [16]; cocaine, see Grossman and Chaloupka [17] and illicit drugs, see Sa¤er and Chaloupka [18]. A key feature of this theory is that consumption of an addictive good will depend on future as well as past consumption.…”

Section: Introductionmentioning

confidence: 99%

Rational alcohol addiction: evidence from the Russian longitudinal monitoring survey

Baltagi

Geishecker²

2006

Health Econ.

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“…Empirical studies have found that, consistent with the behavioural implications of the RA model, individuals tend to reduce their consumption of addictive substances as the anticipated future cost of these substances increases (Becker et al, 1991;Chaloupka, 1991;Waters & Sloan, 1995;Olekalns and Bardsley, 1996;Grossman & Chaloupka, 1998;Labeaga, 1999;Baltagi & Griffin, 2002). These consistent findings across studies have led to the acceptance of the RA model as the standard framework for modelling addiction (Gruber & Koszegi, 2001).…”

Section: Introductionmentioning

confidence: 90%

The Welfare Implications of Addictive Substances: A Longitudinal Study of Life Satisfaction of Drug Users

Moschion

Powdthavee

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. provide longitudinal evidence that a drop in life satisfaction tends to precede the use of illegal/street drugs. We also find that the abuse of alcohol, the daily use of cannabis and the weekly use of illegal/street drugs in the past 6 months relate to lower current levels of life satisfaction. This provides empirical support for the utility misprediction model. Further, we find that the decrease in life satisfaction following the consumption of illegal/street drugs persists 6 months to a year after use. In contrast, the consumption of cigarettes is unrelated to life satisfaction in the close past or the near future. Our results, though only illustrative, suggest that measures of individual's subjective wellbeing should be examined together with data on revealed preferences when testing models of rational decision-making. Terms of use: Documents in JEL Classification:D03, I12, I18, I30

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Rational Addiction to Caffeine: An Analysis of Coffee Consumption

Cited by 95 publications

References 1 publication

Demand for coffee in Sweden: The role of prices, preferences and market power

Demand for coffee in Sweden: The role of prices, preferences and market power

Rational alcohol addiction: evidence from the Russian longitudinal monitoring survey

The Welfare Implications of Addictive Substances: A Longitudinal Study of Life Satisfaction of Drug Users

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