The Demand for Alcoholic Beverages

An Experiment in Econometric Method

William A. Niskanen

Expert InsightsPublished 1962

A framework designed to evaluate the structure of taxes and controls confronting consumers of alcoholic beverages. An econometric model of the alcoholic beverage market is presented, which estimates the demand and supply functions for some legally and illegally produced spirits. The actual and "objective" tax programs of the alcoholic beverage market are examined. A tax program is also suggested, based on an estimate of th relation of the average consumption of each beverage to the total social cost of intemperate consumption behavior. A framework designed to evaluate the structure of taxes and controls confronting consumers of alcoholic beverages. An econometric model of the alcoholic beverage market is presented, which estimates the demand and supply functions for some legally and illegally produced spirits. The actual and "objective" tax programs of the alcoholic beverage market are examined. A tax program is also suggested, based on an estimate of the relation of the average consumption of each beverage to the total social cost of intemperate consumption behavior.

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Niskanen, William A., The Demand for Alcoholic Beverages: An Experiment in Econometric Method. Santa Monica, CA: RAND Corporation, 1962. https://www.rand.org/pubs/papers/P2583.html.
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