How similar are alcohol drinkers? International evidence

Abstract

Stigler and Becker (1977) argue that tastes neither change capriciously nor differ importantly between people; it is differences in prices and incomes that determine differences in behaviour. In this paper we analyse the alcohol consumption patterns of drinkers from 8 industrialized countries. We identify a number of empirical regularities and verify Stigler and Becker's hypothesis that income and price elasticities of demand are international constants by showing that alcohol consumption patterns in the eight countries exhibit intriguing similarities. The income and price elasticities of alcohol are found to be about 0.8 and −0.6, respectively, in all eight countries.

Acknowledgements

The author would like to thank Professor Ken Clements of the University of Western Australia and the editor and associate editor of this journal for their constructive comments.