Wednesday, 10 September 2014

The advantages of beer drinking

.... at least in Russia.

Understanding consumer behaviour is crucial for many economic questions. A new column - The persistence of consumption habits by Lorenz Kueng and Evgeny Yakovlev - at looks at the persistence of consumer habits towards alcohol among Russian males. Beer sales expanded rapidly after the collapse of the Soviet Union both in levels and relative to vodka sales, driven mainly by the beer consumption of cohorts born in the 1980s and 1990s. The authors estimate that this trend will reduce the male mortality rate in Russia by one quarter in the next 20 years.

The conclusion of the paper is,
We study the implications of our results for the evolution of life expectancy of working age males, taking into account the persistent habits we uncovered. It is important to note that of the 40% alcohol-related deaths each year, only about 7% are due to alcohol poisoning. Over 30% are due to external causes related to alcohol intoxication, including vehicular and other accidents and homicides, and hence are also unrelated to long-run consequences of alcohol consumption, such as liver cirrhosis. To proceed with the analysis, we estimate a hazard model of death as a function of the share of alcohol consumed, controlling for many individual characteristics, in particular the level of total alcohol intake. The estimates show that consuming the same level of alcohol but doing so by using more vodka rather than beer is associated with a significantly higher mortality rate, both statistically and economically.

Using our results, we estimate that male mortality in Russia will decrease by one quarter within 20 years even under the status quo, that is, under the current set of policies and current levels of relative prices of alcoholic beverages. This will happen simply because new generations will be more accustomed to beer and will replace older generations with strong preferences for vodka. Since much of the gap in male life expectancy is due to occasional binge drinking (even holding fixed the average level of alcohol intake), which in turn is more likely to occur for males who prefer vodka, this shift in consumption habits toward beer has strong effects on life expectancy. Hence, this reduction in the male mortality rate will be the result of changes that occurred several decades ago.
So drinking beer rather than vodka has its positives.

1 comment:

Tim Worstall said...

And thus the rise of the Beer Lover's Party in immediately post Soviet times. There was one in Russia but I can't remember whether it actually won seats in the Duma. It might have done. The Polish Beer Lover's Party though was very successful. 16 seats in the Sejm.

that's one in the eye for Bryan Caplan and the Myth of the Rational Voter then....