An estimate of the effects of age, taxes, and other socioeconomic variables on the alcoholic beverage demand of young adults

Abstract

The purpose of the present study is to determine the effects that age, taxes and other socioeconomic variables have on the alcoholic beverage demand of young adults. OLS regression analysis, in combination with a Chow Test and a pooled data set, is used to determine the effects of age, taxes and other socioeconomic variables on alcohol consumption. NLSY-Geocode data is used in the analysis. Results suggest that taxes have minor effects on alcohol consumption, and the only factors that are statistically significant in all analyses are marital status, sex, race, and level of education. In addition, statistical tests indicate that the factors that affect alcohol consumption change as a person ages.