Author(s)  
Marit Hinnosaar
Elaine Liu

How malleable is alcohol consumption? Specifically, how much is alcohol consumption driven by the current environment versus individual characteristics? To answer this question, we analyze changes in alcohol purchases when consumers move from one state to another in the United States. We find that if a household moves to a state with a higher (lower) average alcohol purchases than the origin state, the household is likely to increase (decrease) its alcohol purchases right after the move. The current environment explains about two-thirds of the differences in alcohol purchases. The adjustment takes place both on the extensive and intensive margins.

Publication Type  
Working Paper
File Description  
First version, May 2022
JEL Codes  
I12: Health Production
L66: Industry Studies: Manufacturing of Food , Beverages, Cosmetics, Tobacco, Wine and Spirits
D12: Consumer Economics: Empirical Analysis
Keywords  
alcohol
geographic variation
migration
taxes
regulation