Beer Prices Research Articles

Ski Bums

129 Ski Bums Eric Weinberger If you had nothing else to do in Kitzbühel, you could always start a rumor. “Did you hear? The price of beer at the Londoner is going down. Back to thirty schillings on March first.” “Snow’s coming. A big dump expected Friday, to last all weekend.” The price of beer and the next snowfall: rumors along these lines could set a resort alight. It was all anyone cared about, the snow especially , in that meager winter. In December, when there was lots of snow, it was the price of the Londoner’s beer. On a Tuesday it was said the prices would go up Thursday; on the Thursday, it was said the day was now Sunday; and so on, almost two weeks of this, before the prices did go up. Then, towards the end of winter, we wondered when they would go down. Once the tourists left, once the snow was gone, mid-March, early April: the prices remained the same. Meanwhile, it didn’t snow. After all that snow in December, there was snow two days in January after the Hahnenkamm races, and then nothing until February, when it came twice: once in the second week, then a four-day blizzard two days later that caused ten thousand holiday skiers to wipe out. And that was it. But still the rumors: snow today, snow tomorrow, a light flurry, then a blizzard at the end of the week. The worst rumor-mongers were the Austrians. Obviously, they had the most at stake: if it didn’t snow, they lost business. At the rentals shop the tourists would come in each day, anxiously, and ask if snow was forecast for the weekend. “There will be snow soon,” my supervisor Lenz would pronounce in his most oracular voice. “Tuesday night, Wednesday morning at the latest.” He didn’t know, of course, not any more than what he had read in the paper or seen on the evening news. But to the tourists, Lenz and Toni and all the others—the men who ran the ski school and worked the lifts—were mountain men, and mountain men could feel it in their skin and bones, smell it in the air, sniff it out, 130 Ecotone: reimagining place when snow was coming. Lenz was an impressive liar: I would believe him too. He had a serious look on his face, and bright earnest pop-eyes; with his callused hands and blue working overalls he had the look of a man who has spent his entire life working on skis and skiing. He never said the snow wasn’t coming, and might never come, and that really they were wasting their time. He said: “Snow Tuesday night. Perhaps for three days.” Further embellishing his forecast, he suggested precedents and patterns. “It always snows the last week in January. There was snow yesterday in the Vorarlberg and the Italian Dolomites. Thirty centimeters in East Tyrol alone. The snow is coming very soon.” But alone with me, Lenz was different. “Good skiing, Lenz. New snow.” When it did snow, I was delighted, and took my delight to work. Lenz would hold his fingers an inch apart. “Bah, new snow. About two centimeters.” Or when I came in, having studied the Panoramablick, the television pictures beamed back from the top of the mountain: “It’s snowing up top, Lenz. It’s been snowing all morning.” Again the two fingers bent crooked, held apart. “Ja, new snow. Maybe one centimeter. Tomorrow when it rains, it will be all gone.” It was discouraging talking to Lenz about the weather. As it turned out, it didn’t matter. I skied every day and in all conditions, in the worst cold, in rain, and during whiteouts. I skied little powder that winter but plenty of ice and crud and certainly bare patches. A ski could go over things one wouldn’t expect it to, I discovered, like mud, rocks, or grass (so long as it was wet), wooden planks, and fallen tree branches. Once in early March, I skied the bottom half of the streif with Chip Bennett (him using the skis he would later...

Correlates of In-Store Promotions for Beer: Differential Effects of Market and Product Characteristics*

We estimated the strength and direction of the association between product characteristics (beer type, package size, and brand name) and market-area socioeconomic characteristics, and promoted sales of beer in grocery stores. Supermarket scanner data from 64 market areas across the United States over 5 years were used to estimate regression models of the share of beer sales that are promoted, controlling for beer price, packaging, and type; and for market-level age, race/ethnicity, income, unemployment rate, and percentage of the population living in an alcohol control state. Large-volume units, such as 144-oz and 288-oz packages, are more likely to be promoted than smaller package sizes. Malt-liquor beverages are less likely to be promoted than non-malt-liquor beverages. Age, race/ethnicity, income, and geographic location of the market area are not significantly related to promoted beer sales. Marketing research has shown that in-store merchandising and promotions can substantially increase beer sales and that purchasing large package sizes may increase total consumption. Our results suggest that high levels of promoted sales for large-volume beer packages may result in increased beer consumption.

Violence-related injury and the price of beer in England and Wales

The paper examines the influence of the real price of beer on violence-related injuries across the economic regions in England and Wales. The data are monthly frequency of violent-injury collected from a stratified sample of 58 National Health Service Emergency Departments 1995–2000. An econometric model based on economic, socio-demographic and environmental factors was estimated using panel techniques. It is shown that the rate of violence-related injury is negatively related to the real price of beer, as well as economic, sporting and socio-demographic factors. The principal conclusion of the paper is that the regional distribution of the incidence of violent injury is related to the regional distribution of the price of beer. The major policy conclusion is that increased alcohol prices would result in substantially fewer violent injuries and reduced demand on trauma services.

Price of beer and violence-related injury in England and Wales

Relationships between violence-related injury and potential risk factors in England and Wales were investigated over a five-year period, 1st May 1995 to 30th April 2000. Records from all 10 economic regions of England and Wales relating to price of alcohol, youth real income, wealth, ethnic density, dates of major sporting events and seasonality were studied with reference to violent injury data derived from 58 Emergency Departments (EDs) over the same period. Panel estimation and multi-level modelling was used to evaluate associations between variables. Overall, 353,443 violence-related A&E attendances were identified over the five-year period. High regional violence-related injury rates correlated with low real price of alcohol as measured by price of beer. Rates of violence were higher during summer months and on days of major sporting events. Risk of injury in violence was closely linked to alcohol price. Beer price rises should therefore reduce violent injury. Injury reduction efforts should be intensified during the summer and on days of major sports events.

Poverty and crime in 19th century Germany

We estimate the impact of poverty on crime in 19th century Bavaria, Germany. Rainfall is used as an instrumental variable for grain (rye) prices to address econometric identification problems in the existing literature. The rye price was a major determinant of living standards during this period. The rye price has a positive effect on property crime: a one standard deviation increased property crime by 8%. OLS estimates are twice as large as instrumental variable estimates, highlighting the value of our empirical approach. Higher rye prices lead to significantly less violent crime, though, and we argue that higher beer prices, caused by the higher rye prices, are a likely explanation.

ALCOHOL TAXES SAVE LIVES: RESPONSE TO HOLDER

We are grateful to Harold Holder for his careful review of our paper and insightful summary of the implications of our findings (Holder 2005). We strongly agree that the main conclusion to be drawn from our somewhat complex analyses is that alcohol taxation is a potent means of reducing population level acute mortality caused by alcohol. We also agree that we cannot confidently attribute the reductions in deaths caused by the chronic effects of excessive drinking in the population as a whole to a delayed response to the Living With Alcohol (LWA) levy and/or programme itself. The results presented for Indigenous and non-Indigenous Australians both showed large reductions in chronic deaths after the Levy was removed, although this change was significant only with a simple t-test for the non-Indigenous population. We would note, however, that the results shown for Indigenous and non-Indigenous deaths lacked controls that were available for our other analyses, i.e. controls to reflect changes in alcohol-caused deaths in adjoining geographic areas and also in non-alcohol-caused deaths in the Northern Territory (NT) itself. This was due to the lack of reliable data on Indigenous status in the control regions and until quite recently in the NT (Chikritzhs et al. 2005). They are, however, indicative of some benefits from an alcohol tax increase to Indigenous Australians which is important, given concerns often expressed that price increases would only further disadvantage this sector of Australian society. We further acknowledge that we cannot be sure of the extent to which the new programmes funded by the alcohol tax contributed to the measured reduction of alcohol-caused deaths over and above the effects of the tax itself. In reviewing the nature of the programmes that were funded we formed the opinion earlier that many had been shown to be effective in other studies (Stockwell et al. 2001), such as the enforcement of liquor laws with supportive media campaigns (e.g. McKnight & Streff 1994) and drink-driving campaigns (McKnight & Voas 2001). We would like to add the information that while the tax administered for the first 5 years of the LWA programme on alcoholic drinks with 3.0% or more alcohol content by volume may seem minor—just 5 cents per standard drink (or per 10 g of ethyl alcohol)—at that time this amounted to a substantial increase in retail price of cheap high alcohol content drinks often linked with serious alcohol-related harm (e.g. Stockwell et al. 1998). The tax increase was indeed passed on to the customer (Chikritzhs et al. 1999) and was equivalent to approximately 15% of the retail price of popular packaged wine and some 8% of the price of full strength beer purchased from a liquor store (see e.g. Stockwell & Crosbie 2001). Another limitation was that our analyses were only of impacts on that most significant of all bottom lines in public health and safety—premature mortality. We were unable to access sufficiently complete and reliable data from all three jurisdictions for more fine-grained analyses of, for example, road crashes or hospital separations for specific causes other than those that were fatal. Our previous analysis of the first 4 years of the LWA (Chikritzhs et al. 1999; Stockwell et al. 2001) found evidence of widespread health and social benefits across these various domains. The unfortunate postscript to this story is that an Australian High Court ruling in August 1997 struck down the constitutional right of the states and territories to raise any taxes on alcohol (or tobacco or petrol). We believe our research adds to the international evidence that this very power to raise alcohol taxes is also the power to prolong the lives of tax payers. We hope our findings will be used to encourage other jurisdictions, including the Commonwealth Government of Australia, to use alcohol taxes as a means of preventing premature mortality caused by alcohol.

The process of vertical coordination and its consequences within the beer commodity chain

The paper aims to identify the potential benefits from vertical coordination within the selected commodity chain. The problem is applied to the beer commodity chain because of its high importance in the Czech agribusiness and foreign trade. On the basis of the vertical analysis of the chosen commodity chain, a mathematic model of consumer price simulation is created and the existence of vertical coordination is verified in the analysed commodity chain. This model assumes that input price increases are transmitted to consumers. The retail prices of beer are simulated by holding technology and input-output relationships constant, while production as well as marketing costs change according to the changes in input prices. The simulated retail price is then compared with the actual retail price to indicate productivity gains resulting from vertical coordination passed on to consumers. The results of the Model of Retail Price Simulation show that Czech brewery industry was in the observed period (1994–2002) vertically coordinated.

Can the leaseholder survive in the UK licensed trade?

The Beer Orders demanded that UK breweries reduced the number of public houses which they owned. This led to the reorganisation of the retail sector of the industry, and the emergence of new companies which owned the outlets and then rented out the premises. They also supplied the beer, so as to increase their income. The largest of these companies, financed by venture capitalists, involved themselves in a series of purchases and so acquired thousands of premises which were regularly traded so that their owners could develop what they regarded as the ideal estates. The tenants and lessees complained of high rents and high beer prices resulting from the tie, so that profitability became a problem. Many owners appear more interested in their own profits than the viability of their lessees. As a result, some lessees are openly expressing discontent, to the extent that the sustainability of these leases must be questioned.

What will we learn from ITER?

At the time of writing, we are once again at the threshold of an international agreement to go ahead with the construction of the ITER (International Thermonuclear Experimental Reactor) project, uniting the research efforts of Europe, Japan, China, Korea, Russia and the USA. It is very much the hope that at the time of reading, preparations at the construction site, whether in Europe or Japan, will be well underway. The project is extremely ambitious and carries a significant construction cost, roughly 500M€ per year over 10 years of construction. If built in Europe, the likely domestic cost will be 250M€ per year to the European taxpayer, including Switzerland. Although this is of course very large for a scientific research project, it still only represents the sum of 2.5€, or the average price of a small beer in Europe for each taxpayer every year, a much lower cost than many marketing projects. Why spend so much? What will we learn from ITER? These questions have been raised in some academic circles, contesting the size of such an investment in a scientific experiment. We consider it judicious to attempt a reply, addressed to the general physics research community, explaining what will be achieved and especially what lessons will be learned. Is ITER a project in the basic sciences lineage, searching ultimate truths about the nature of the world, or about the origins of our universe? The answer is “No”. Such questions have an essential purity about them, a purity that has always appealed, both to the initiated and to the uninitiated, as representing a noble cause, a scientific golden fleece. The world’s largest accelerators have always received relatively constant support in Europe, in spite of the difficulty the public at large has to grasp the significance of the results obtained, or even understand the questions being addressed. ITER is nonetheless a noble cause, even though its main motivation stems from our increasingly urgent quest for sustainable energy. The nobility resides equally in the physical understanding to be acquired of the complexity of plasmas and in the technical challenges to be met. The requirements for controlled nuclear fusion are potent drivers for advances in physics and technology. This quest has also brought a harvest of fundamental knowledge in physics, in such complex areas as turbulence, magnetohydrodynamics and even material sciences, with implications for apparently unrelated areas such as astrophysics, space physics and industrial plasmas, spawning applications ranging from plasma processing to space propulsion systems, the development of novel materials and superconductors. The ITER project is set to take this endeavour a major step further into uncharted territory. In the following we shall try to remind the reader of the “why ITER?” with a brief introduction and then recall the present state of our research into controlled fusion using magnetic confinement of plasmas. The status today is, simply stated, that we believe that our long-term vision can become reality, but we need to make a leap forwards to demonstrate this. ITER is the long-awaited step needed to take fusion out from the present large laboratory experiment in the direction of a full power station. We shall see that our question “why ITER?” leads to a simple answer “to establish whether our vision can become real”.

The price elasticity for alcohol in Sweden 1984–2003

■ Aims The article addresses the following research questions: (i) How strong is the price elasticity for beer, wine and spirits? (ii) How rapid is the effect of a price change? (iii) Is the price elasticity stable across time and space? (iv) Does an increase in price give a corresponding effect as a decrease? ■ Methods & Data The sales data cover Systembolaget's retail sales of beer, wine and spirits for the period from January 1984 to March 2004. The price indexes are based on weighted baskets deflated by a consumer price index. Most of the analyses were performed on quarterly data. The data were analysed using the Box-Jenkins technique for time series analysis. ■ Results The price elasticities—as estimated from quarterly data—were statistically significant for all beverages; –0.8 for beer, –0.6 for wine and and –1 for spirits. Similar estimates were obtained from monthly data, suggesting a fast consumer response to price changes. The elasticity for beer was weaker during the period 1995–2004 (-0.6) than during the period 1984–1994 (-1.4), but it was no different in southern Sweden than in the remainder of the country. An increase in the price of spirits seems to affect sales as much as a price decrease, that is, the price effect seems to be symmetric. Finally, the results indicated that since 1995 sales of beer and wine increased more, and spirits sales less, than predicted from the development in prices. ■ Conclusions The study confirms previous findings that the demand of alcoholic beverages is responsive to changes in price; however, price is not the sole factor that drives the trends in sales. The reduced elasticity for beer may be due to the marked drop in beer prices.

Type of alcoholic beverage and high-risk drinking: how risky is beer drinking in Korea?

To examine the association of beverage type with high-risk drinking in Korea. Data were analysed from the Korea's 1997 behavioural risk factor surveillance system survey collected by a stratified random sampling method (n = 1045). After alcohol consumption per drinking day was categorized into three risk levels for short-term or 'acute' harm on the basis of the World Health Organization's guidelines, logistic regression analysis adjusting for socio-demographic factors was performed for each beverage type. Using beer drinkers as the reference, those who drank soju (the most widely consumed traditional beverage in Korea) showed an adjusted odds ratio (OR) of 3.62 [95% confidence interval (CI) = 2.28-5.76] for high and very high risk from drinking and those who drank spirits had adjusted OR of 10.65 (95%CI = 4.32-26.27). In Korea, unlike in many western countries, beer is not the highest risk beverage. The relatively high price of beer in Korea is likely to be one influence. It is concluded that country-specific differences are important in studies on associations between alcoholic beverage types and high risk drinking.

Effects of communities, neighborhoods and stores on retail pricing and promotion of beer.

This study examines how communities, neighborhoods and stores influence retail pricing and promotion of beer. In the year 2000, trained field staff conducted observations in 2,024 retail alcohol stores in 160 communities throughout the contiguous United States. Based on a nationally representative sample of schools, we selected communities defined by the school's catchment area, or the vicinity from which the majority of students are drawn. We randomly selected off-sale alcohol retail establishments from a complete list of stores likely to sell tobacco or alcohol in the selected communities. Beer price and promotions are based on observations of Miller and Budweiser beer brands in the stores. Neighborhoods are defined by the store's census block. We used cross-sectional, hierarchical regression models and mixed methods procedures to analyze data. Community, neighborhood and store characteristics were related to beer price; however, only community and store characteristics were predictive of beer promotions. Overall, the pricing and promotion of beer vary systematically by some characteristics of communities, neighborhoods and stores, but not significantly by the number of young people populating a neighborhood. In addition, pricing and promotion of Budweiser and Miller beers, in particular, do not appear to target racial minority populations. Because of the significant effect of store characteristics, public health agencies and advocates might focus prevention efforts on collaborations with liquor control agencies to reduce variations in pricing and promotion of beer, which ultimately encourage risky drinking behaviors. Further studies are needed to examine the effects of pricing and promotion on alcohol-related social problems.

The Changing Structure of UK Brewing and Pub Retailing

This article charts the major structural changes that have occurred in both UK brewing and pub retailing during the period 1989–2000. A key theme has been the rapid consolidation of the brewing sector in an attempt to achieve economies of scale in production, distribution and marketing. The dominance of the national brewers has allowed them to place increased product emphasis on marketing and me power of brands — particularly lager, me national breweries control all me major lager brands. In tandem with these brewers, me growth and dominance of me national pub chains has garnered apace over the past ten years and in order to maximise profit margins they have established supply arrangements with me national brewers; it has been in the interests of these chains to limit choice thereby maximising the discounts received from their suppliers. The article therefore shows that regional and local brewers cannot compete on price. Competition between pubs is also highlighted. Because beer prices are relatively inelastic, emphasis is placed on the level of amenities provided in pubs, and in particular the branding of pub outlets. Key among these amenities is the provision of food, which now accounts for a substantial percentage of total pub sales.

DYNAMIC GAINS AND STATIC LOSSES IN OLIGOPOLY: EVIDENCE FROM THE BEER INDUSTRY

The paper provides a new perspective on the estimate of the welfare losses due to oligopoly. I argue that the conventional analysis of monopoly/oligopoly welfare losses can be misleading. If causation runs from investment in new technology to increased concentration, dynamic gains from innovation should be taken into account for a fuller analysis of welfare losses. I use beer‐industry data to demonstrate that technological changes Granger‐cause beer prices, and beer prices Granger‐cause the Herfindahl index. I then estimate the dynamic gains to consumers in the beer industry and find these gains to be impressive relative to conventional static losses. (JEL L10, L13)

BINGE DRINKING IN COLLEGE: THE IMPACT OF PRICE, AVAILABILITY, AND ALCOHOL CONTROL POLICIES

This paper estimates the effects of beer prices, alcohol availability, and policies related to driving under the influence of alcohol on drinking and binge drinking among youths and young adults. Data are from a nationally representative survey of students in U.S. colleges and universities. Separate estimates are obtained for underage male and female students, as well as for older male and female students. The estimates indicate that the drinking practices of male college students are generally insensitive to the price of beer. However, underage drinking and binge drinking by female students do respond significantly to price, although both are relatively inelastic. The results also show that strong drunk driving policies targeting youths and young adults significantly reduce drinking and binge drinking by male students. Similarly, these policies reduce drinking among female college students but appear to have little impact on their binge drinking. Instead, the results indicate that many elements of campus life (including participation in a fraternity or sorority, living on campus, and the ready availability of alcoholic beverages) are among the most important determinants of drinking and binge drinking among college students.

Structural Changes in the Danish Alcohol Market

This report researched yearly (1978–1994) and quarterly (1990–1994) data on the Danish consumption of beer, wine and spirits in order to identify changes in the market shares of each of these types of alcohol which were caused by major tax reductions for beer and wine in 1991 and 1992. Plots of the data immediately show that the sales of spirits decreased while the sales of wine increased. These changes are too large to be explained only by the reduction of the cross-border trade with Germany. Cross-border trade was the main reason for the tax reductions. The statistical analyses give a more precise picture of the reasons for the reduction in the market share of spirits in the total Danish alcohol sales, from 14 percent in 1990 to 11 percent in 1993. The main part of this reduction, at least 2 percent, is caused by the tax-induced changes in price relations, while, at most, 1 percent comes from a trend movement. The market share of beer has been almost constant for many years. However, the statistical analysis shows that a trend movement tends to reduce market share, while a reduction in beer price, relative to the price of spirits caused by tax reductions, has increased the market share, resulting in minimum change for the beer sector. The market share of wine has been steadily increasing since the 1970s and no dependencies on the prices of alcohol was found.

Structural Changes in the Danish Alcohol Market

This paper examines annual (1978–1995) and quarterly (1990–1995) data on the Danish consumption of beer, wine and spirits, in order to identify changes in their respective market shares as a result of the major tax cuts introduced for beer and wine in 1991 and 1992. It is immediately clear that the sales of spirits have decreased while the sales of wine have increased. The changes are too large to be explained exclusively on the basis of the reduced level of border trade with Germany, the main motive for the tax reductions. The statistical analyses give a more detailed picture of the reasons for the decline in the market share of spirits in total Danish alcohol sales from 14 % in 1990 to 11 % in 1993. It is included that the main part of this fall, at least 2 %, is due to the tax-induced changes in price relations, while more than 1 % comes from a trend movement. The market share of beer has been relatively constant for a number of years. However, this is the net effect of a trend movement tending to reduce its market share and, on the other hand, the reduced price of beer relative to the price of spirits caused by the tax reductions, which has increased its market share. The market share of wine has been steadily increasing since the 1970s. There is no evidence of any dependencies on the prices of alcohol. This conclusion cannot, however, be sufficiently documented on the basis of the Danish data series, as it is impossible to distinguish between effects due to changing wine prices and effects due to changing beer prices, because of the parallel tax cuts for beer and wine.

Breath testing in Canada: deterrence or detection?

The purpose of this paper is to estimate the effect of the preliminary breath test law on drunk driving in Canada. Using an Annual time-series of provincial cross-sectional data consisting of six provinces from 1952 to 1988, it is found that the law seems to have a negative effect on non-alcohol-specific fatality and fatal accident rates. However, the estimate of the effect is sensitive to model pecifications, perhaps due to high multicollinearity among variables. But the law seems to have a positive effect on the alcohol-specific fatal accident rate using data from the province of Ontario for the period 1954–88. Our interpretation is that the breath test law has two simultaneous effects on drunk driving: deterrence and detection effects. The results suggest that the deterrence effect is weak and the detection effect is dominating. One robust result is that the real beer price has a negative effect on drunk driving traffic accidents.

The Impact of Excise Duty Changes on Retail Prices in the UK

The annual exercise of revising excise duties has become part of Budget Day tradition. The need for such revision arises because, unlike VAT and the ad valorem tax on cigarettes, excise duties are set in nominal terms according to the physical quantity of the goods on which they are levied. Hence, regardless of any policy-based changes, if the real value of excise duties is to be maintained, the effect of inflation must be countered. However, there is perception in some quarters that producers respond to changes in excise duty rates by increasing prices beyond those implied by the tax alone. No doubt there is considerable potential for 'bar-room debate' over, for example, the contention that if the Chancellor puts 1p on the price of beer, the brewers will add another 1p for themselves. Underlying such a contention is the notion that there is some feature of the industries subjiect to excise duties which allows them to engage in such behaviour. It is noticeable that the principal industries on which excise duties are levied, namely alcohol, tobacco and petrol, have been the subject of major Monopolies and Mergers Commission investigations.

Advertising and the US market demand for beer

The US per capita market demand for beer is empirically estimated to determine the effect of advertising on the demand for beer. The empirical results indicate that the most important determinants of demand are the price of beer, the price of substitutes, demographic factors, and a light beer dummy variable. The positive effects of income and lagged consumption appear to be small. Although many have argued that advertising promotes beer consumption, the empirical results of this study do not support this hypothesis.