Malleability of Alcohol Consumption: Evidence from Migrants
53 Pages Posted: 9 Apr 2020 Last revised: 25 Oct 2021
Date Written: September 22, 2021
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.
Keywords: alcohol, geographic variation, migration, taxes, regulation
JEL Classification: L66, I12, D12, I18
Suggested Citation: Suggested Citation