Working Paper: CEPR ID: DP15196
Authors: Marit Hinnosaar; Elaine M. Liu
Abstract: 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. Right after moving, movers’ alcohol purchases converge sharply toward the average level in their destination state, implying that the current environment explains about two-thirds of the differences in alcohol purchases. The adjustment takes place both on the extensive and intensive margin.
Keywords: alcohol; geographic variation; migration; taxes; regulation
JEL Codes: I12; L66; D12; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Consumers moving from one state to another (R20) | Alcohol purchases converge towards the average level in the destination state (H73) |
| Current environment (P18) | Alcohol purchases (L66) |
| Moving to states with a higher share of consumers buying alcohol (L66) | Likelihood of movers purchasing alcohol (L66) |
| Moving to states with a smaller share of consumers buying alcohol (L66) | Likelihood of movers purchasing alcohol (L66) |
| Moving to states with higher average alcohol purchases (L66) | Larger adjustments in alcohol purchases (L66) |
| Local regulations, norms, and peer behaviors (C92) | Alcohol consumption patterns (L66) |