Millennials and the alcohol industry: expenditure variations among generations

Abstract

ABSTRACT This paper explores the relationship age cohorts, or generations, have had with regards to alcohol expenditure over time. Articles from popular publications claim Millennials are ‘killing’ the alcohol industry due to their lack of consumption, but provide little empirical analysis of any academic rigour to make such claims. These claims do matter, as they have implications for the alcohol industry itself as well as investors and policymakers. This paper uses four cross-sectional decadal datasets spanning from 1986 to 2016 from the Bureau of Labour Statistics Consumer Expenditure Interview Survey (CEX) to determine the validity of these claims, while controlling for factors such as income, expenditures, and demographics. The question being explored is, ceteris paribus, does the Millennial generational expenditure on alcohol differ from previous generations? Left-censored Tobit I models indicate that Millennials spend more on alcohol than previous generations, contradicting the claims of these articles. Following the regression analysis is a discussion of the results and their implications.