Final published version
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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Alcohol quantity and quality price elasticities
T2 - quantile regression estimates
AU - Pryce, Rob
AU - Hollingsworth, Bruce Philip
AU - Walker, Ian
PY - 2019/4/30
Y1 - 2019/4/30
N2 - Many people drink more than the recommended level of alcohol, with some drinking substantially more. There is evidence that suggests that this leads to large health and social costs, and price is often proposed as a tool for reducing consumption.This paper uses quantile regression methods to estimate the differential price (and income) elasticities across the drinking distribution. This is also done for on-premise (pubs, bars and clubs) and off-premise (supermarkets and shops) alcohol separately. In addition, we examine the extent to which drinkers respond to price changes by varying the ‘quality’ of the alcohol that they consume. We find that heavy drinkers are much less responsive to price in terms of quantity, but that they are more likely to substitute with cheaper products when the price of alcohol increases. The implication is that price-based policies may have little effect in reducing consumption amongst the heaviest drinkers, provided they can switch to lower quality alternatives.
AB - Many people drink more than the recommended level of alcohol, with some drinking substantially more. There is evidence that suggests that this leads to large health and social costs, and price is often proposed as a tool for reducing consumption.This paper uses quantile regression methods to estimate the differential price (and income) elasticities across the drinking distribution. This is also done for on-premise (pubs, bars and clubs) and off-premise (supermarkets and shops) alcohol separately. In addition, we examine the extent to which drinkers respond to price changes by varying the ‘quality’ of the alcohol that they consume. We find that heavy drinkers are much less responsive to price in terms of quantity, but that they are more likely to substitute with cheaper products when the price of alcohol increases. The implication is that price-based policies may have little effect in reducing consumption amongst the heaviest drinkers, provided they can switch to lower quality alternatives.
KW - Alcohol demand
KW - Quantile regression
KW - Quality elasticity
U2 - 10.1007/s10198-018-1009-8
DO - 10.1007/s10198-018-1009-8
M3 - Journal article
VL - 20
SP - 439
EP - 454
JO - European Journal of Health Economics
JF - European Journal of Health Economics
SN - 1618-7598
IS - 3
ER -