The Own-Price Elasticity of Alcohol: A Meta-Analysis

Interpreting the own-price elasticity of demand for alcohol literature is difficult. While numerous studies have been conducted, the point estimates reported vary dramatically. Some studies suggest the demand for alcohol is price inelastic, others suggest it is price elastic. This paper presents an empirical synthesis of own-price elasticity of demand for alcohol estimates using the technique of meta-regression analysis. 150 point estimates, drawn from studies covering 18 different countries are considered. The results of the empirical work reported in this paper suggest: the year of the study, the length of study, the per capita level of alcohol consumption, and the relative ethanol share of a beverage are important factors when explaining variations in estimates of the own-price elasticity of demand for alcohol. Interestingly, the study also suggests country specific and beverage specific effects are not statistically significant.

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