The demand for alcohol: a meta-analysis of elasticities

Numerous studies have estimated elasticities of alcohol demand using different procedures. Because of widespread differences in demand estimates, however, it is difficult to synthesise the literature into coherent meaning. This study improves our understanding of alcohol demand by reporting results from a meta-analysis of 132 studies. Specifically, regressing estimated price, income and advertising elasticities of alcohol on variables accounting for study characteristics, we find alcohol elasticities to be particularly sensitive to demand specification, data issues and various estimation methods. Furthermore, compared to other alcoholic beverages, beer elasticities tend to be more inelastic.alcohol demand, elasticity, meta-analysis, Demand and Price Analysis,

Convergence Of Market Shares In The U.S. Cigarette Industry

Many studies examine the degree of rivalry in an industry by utilizing measures of market share instability, with greater (lesser) volatility of market shares coinciding with greater (lesser) rivalry. This short paper extends this line of research by addressing long run instability of market shares. In particular, we test for the convergence of market shares in the U.S. cigarette industry using unit root procedures. Our finding that market shares for pairs of firms rarely converge suggests that market shares are unstable in the long run. Hence, rivalry has remained quite intact in the cigarette industry

Cyclicality and the Labor Market for Economists

A multimarket theory of optimal search suggests that job seekers will respond to a weakening market by adjusting their search strategies at the extensive margin (which markets to enter) and the intensive margin (how many applications to submit per market). Meanwhile, employers respond to the weakening market by raising their hiring standards. The equilibrium suggestst that high quality applicants will obtain an increased share of academic interviews in weak markets while applicants from weaker schools will increasingly secure interviews outside of the academic market. Empirical results show that in the bust market, graduates of elite schools shifted their search strategies to include weaker academic institutions, while graduates of lower ranked schools shifted their applications away from academia and toward the business sector. In bust conditions, academic institutions increasingly concentrate their interviews on elite school graduates, women and U.S. residents.

The Business Cycle And Competition In The U.S. Brewing Industry

Recent game-theoretic models of cartel behavior assess the sustainability of cooperation in the presence of demand fluctuations.  Depending on the stochastic assumptions of demand, different outcomes are predicted.  Accordingly, this paper investigates the effects of demand fluctuations on competition in the U.S. brewing industry.  The results show that competition among brewers is greater during periods associated with significant negative shocks to demand, lower observed demand, lower expected future industry profit, and lower advertising

Cyclicality and the Labor Market for Economists

Using a unique sample of new Ph.D. economists in 1987 and 1997, we examine how job seekers and their employers alter their search strategies in strong versus weak markets. The 1987 academic market was strong while the 1997 market was much weaker. A multimarket theory of optimal search suggests that job seekers will respond to a weakening market by lowering their reservation utility. This in turn affects their search strategies at the extensive margin (which markets to enter) and the intensive margin (how many applications to submit per market). Meanwhile, employers respond to the weakening market by raising their hiring standards. The combination of strategies on the supply and demand sides suggest that high quality applicants will obtain an increased share of academic interviews in weak markets while applicants from weaker schools will increasingly secure interviews outside of the academic market. Empirical results show that in the bust market, graduates of elite schools shifted their search strategies to include weaker academic institutions, while graduates of lower ranked schools shifted their applications away from academia and toward the business sector. In bust conditions, academic institutions increasingly concentrate their interviews on elite school graduates, women and U.S. residents

Public policy and market power in the rayon industry

This paper investigates the effects of the National Industrial Recovery Act (NIRA) and the Robinson-Patman Act on market power in the 1930s rayon industry. Unlike the traditional structure-conduct-performance approach of constructing measures of market power from accounting data, the model we use in this paper estimates market power from a gauge of the discrepancy between price and marginal cost. The results show that the NIRA increased market power in the rayon industry, whereas the Robinson-Patman Act did not have a noticeable effect on market power. Also, market power appears to have steadily declined throughout the 1930s. © 1997 Temple University

Gradual Switching Regression Estimates Of Alcohol Demand Elasticities

Given that alcohol remains a heavily taxed good, studies of the demand for alcohol are numerous in the literature. This paper uses annual data from 1964-92 to estimate key elasticities of the US demand for distilled spirits. Unlike previous studies, which typically assume elasticities are constant over time, we allow elasticities to vary over time by estimating a gradual switching regression model. The results indicate that the demand for distilled spirits today differs substantially from the 1960s, suggesting that the efficacy of proposed policies is dependent on knowledge of this change in demand

The demand for alcohol: a meta-analysis of elasticities

Numerous studies have estimated elasticities of alcohol demand using different procedures. Because of widespread differences in demand estimates, however, it is difficult to synthesise the literature into coherent meaning. This study improves our understanding of alcohol demand by reporting results from a meta-analysis of 132 studies. Specifically, regressing estimated price, income and advertising elasticities of alcohol on variables accounting for study characteristics, we find alcohol elasticities to be particularly sensitive to demand specification, data issues and various estimation methods. Furthermore, compared to other alcoholic beverages, beer elasticities tend to be more inelastic

The Effect Of The 1971 Advertising Ban On Behavior In The Cigarette Industry

The 1971 ban on TV and radio advertising of cigarettes offers a unique opportunity to uncover the industry response to a change in the mix of advertising. Following the ban, advertising expenditures were shifted away from TV and radio towards print media. Accounting for the impact of this event within a supply and demand framework, the empirical results show that advertising had an insignificant effect on demand during the pre- and post-1971 periods; however, advertising did stimulate competition in the industry prior to the 1971 ban. Copyright. © John Wiley & Sons, Ltd

Cyclical fluctuations and coordination in the US steel industry

The model developed uses a measure of the discrepancy between price and marginal cost to estimate the effects of domestic demand fluctuations on the degree of oligopoly coordination in the US steel industry. Due to the importance of imports, however, domestic demand fluctuations occur whenever market demand and/or import supply shift. Consistent with several recent game-theoretic models, our results show that coordination among US steel producers tends to be weakest when market demand is high and import supply is low