Chapter

Cold Comfort in Hard Times: Do People Drink More Beer during Recessions?

Donald G. Freeman

in The Economics of Beer

Published in print October 2011 | ISBN: 9780199693801
Published online January 2012 | e-ISBN: 9780191731884 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199693801.003.0006
Cold Comfort in Hard Times: Do People Drink More Beer during Recessions?

Show Summary Details

Preview

Do people drink more in hard times? Psychological theories suggest that alcohol consumption increases during recessions as a response to the stresses of economic downturns. In contrast, the conventional view among economists is that beer is a ‘normal’ good: when incomes go up, so does beer consumption. This chapter looks at U.S. state-level data as provided by The Beer Institute to estimate pooled time-series models of annual beer consumption regressed on economic and demographic variables. The empirical analysis confirms the economists' view, with beer consumption falling during recessions. The effect of economic fluctuations on consumption is rather small however; demographics have a far more significant and material effect, with larger shares of young adults in states' populations implying greater consumption of beer per capita.

Keywords: alcohol consumption; pooled time-series; beer; recessions; normal goods; demographics

Chapter.  6450 words.  Illustrated.

Subjects: Economic Systems

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.