The Effect of Advertising on the Total Consumption of Alcoholic Drinks in the United Kingdom: Some Econometric Estimates

Abstract

This paper reports upon an econometric investigation, using aggregate time series data, of the influence of prices, income and advertising upon the demand for alcoholic drink in the UK. The demand for alcoholic drink as a whole is studied initially, and then the analysis is disaggregated to the more detailed level of beer, spirits and wine, taken separately. Income appears to have a marked effect on the demand for these products, and price elasticities are in most cases low.

There is no evidence of a link between total advertising and the total consumption of all alcoholic drinks, spirits or wine. For beer, the evidence on the demand—advertising relationship is ambiguous but, for reasons discussed in the paper, there must be considerable doubt that beer advertising has had an expansionary effect on total beer consumption.