Further evidence about alcohol consumption and the business cycle∗

نویسندگان

  • Sergi Jiménez-Martín
  • José M. Labeaga
  • Federico A. Todeschini
  • Cristina Vilaplana Prieto
چکیده

The main goal of this paper is to test whether macroeconomic conditions affect alcohol consumption using data from the Behavioral Risk Factor Surveillance System for the period 1987–2008. While previous evidence have used pooled cross-section data and rich specifications controlling observed heterogeneity, we feel that both state dependence and unobserved heterogeneity can help in explaining individuals’ behavior. We control for both effects by relying on the construction of pseudo-panel data from the different cross-sections available in the survey. Our results contain three messages. First, unemployment rates have significant effects on becoming drinker and the number of alcoholic beverages consumed but their cyclical or countercyclical effects depend very much on the period under consideration. Second, once unobserved effects and the dynamic nature of the demand models are accounted for, we do not detect business cycle effects independently of the period. Third, we feel that a methodological implication can also be inferred from our results: the importance of taking into account the nature of the zeros when estimating demand models for this good. As a result, inferences obtained without controlling for them should be interpreted with caution. JEL-CLASS: E23, I12

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تاریخ انتشار 2010