Journal article
UNDERSTANDING HETEROGENEITY IN PRICE ELASTICITIES IN THE DEMAND FOR ALCOHOL FOR OLDER INDIVIDUALS
Health economics, Vol.22(1), pp.89-105
01/01/2013
DOI: 10.1002/hec.1817
PMCID: PMC3641566
PMID: 22162113
Abstract
This paper estimates the price elasticity of demand for alcohol using Health and Retirement Study data. To account for unobserved heterogeneity in price responsiveness, we use finite mixture models. We recover two latent groups, one is significantly responsive to price, but the other is unresponsive. The group with greater responsiveness is disadvantaged in multiple domains, including health, financial resources, education and perhaps even planning abilities. These results have policy implications. The unresponsive group drinks more heavily, suggesting that a higher tax would fail to curb the negative alcohol-related externalities. In contrast, the more disadvantaged group is more responsive to price, thus suffering greater deadweight loss, yet this group consumes fewer drinks per day and might be less likely to impose negative externalities. Copyright (c) 2011 John Wiley & Sons, Ltd.
Details
- Title: Subtitle
- UNDERSTANDING HETEROGENEITY IN PRICE ELASTICITIES IN THE DEMAND FOR ALCOHOL FOR OLDER INDIVIDUALS
- Creators
- Padmaja Ayyagari - University of Iowa Health CarePartha Deb - The Graduate Center, CUNYJason Fletcher - Yale UniversityWilliam Gallo - Hunter CollegeJody L. Sindelar - Yale University
- Resource Type
- Journal article
- Publication Details
- Health economics, Vol.22(1), pp.89-105
- DOI
- 10.1002/hec.1817
- PMID
- 22162113
- PMCID
- PMC3641566
- NLM abbreviation
- Health Econ
- ISSN
- 1057-9230
- eISSN
- 1099-1050
- Publisher
- Wiley
- Number of pages
- 17
- Grant note
- R01AG027045 / NATIONAL INSTITUTE ON AGING; United States Department of Health & Human Services; National Institutes of Health (NIH) - USA; NIH National Institute on Aging (NIA) R01 AG027045 / NIA NIH HHS; United States Department of Health & Human Services; National Institutes of Health (NIH) - USA; NIH National Institute on Aging (NIA)
- Language
- English
- Date published
- 01/01/2013
- Academic Unit
- Health Management and Policy
- Record Identifier
- 9984364396202771
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