Evolving Consumption Patterns in the U.S. Alcohol Market: Disaggregated Spatial Analysis

Abstract

AbstractGlobal consumption patterns for alcoholic beverages are evolving, with some convergence in per capita consumption among nations as traditionally beer-drinking nations increase their consumption of wine and, conversely, wine-consuming nations shift towards beer. This article explores regional patterns of alcoholic beverage consumption within the United States. One purpose is to see if similar patterns of spatial convergence in consumption patterns can be observed within countries as have been documented in international comparisons. A more fundamental purpose is to explore the converse question and seek to better understand the persistent differences in alcoholic beverage consumption among groups. These issues are addressed using annual U.S. national and state-level data over four decades and, for the more recent period, supermarket scanner data at finer scales of geopolitical aggregation. Socioeconomic and other demographic variables appear to play significant roles in accounting for the spatial differences in consumption patterns, although the details vary across different models and data sets. The analysis of demand using less-aggregative data for a shorter time period reveals some shortcomings in the corresponding analysis based on state-level data over a longer time period, but with poorly measured prices. These findings might extrapolate to studies making international comparisons using national aggregate data. (JEL Classifications: D12, L66)