The impact of prices on alcoholic beverage consumption in Chile

Daniel Araya and Guillermo Paraje

PLOS ONE, 2018, vol. 13, issue 10, 1-15

Abstract: Introduction and objective: Chile is among the countries with the highest alcohol consumption per capita in Latin America, but little has been done in the way of public policy and policy research to overcome this problem. The objective of the present study is to estimate demand elasticities (own-price, cross-price, expenditure and quality) for three groups of alcoholic beverages in Chile: spirits, wines, and beers. Data and methods: The study uses data from the VII Encuesta de Presupuestos Familiares (Family Budget Survey) 2011–2012 conducted by the National Institute of Statistics. Because of problems with the quality of the measurement units, hot-deck imputation method was used with the alcohol purchases that presented problems. To estimate the demand elasticities, the Almost Ideal Demand System (AIDS) method proposed by Deaton was used. Quality decisions were estimated for each beverage separately using an equation proposed by Deaton in the three-step AIDS. Results: The estimated elasticities were more inelastic for spirits (-0.14, P

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0205932

DOI: 10.1371/journal.pone.0205932

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