ABSTRACT
In Chapter 4, we presented a global picture of alcohol consumption and looked more closely at the consumption patterns of alcohol across various consumer characteristics in a selected number of countries. Following that, in Chapter 8, we analysed the demand for alcohol using a system-wide framework and data from 43 developed and developing countries. We analysed alcohol consumption in the context of the consumer utility maximizing framework and found that income and prices are two of the major economic factors that significantly influence alcohol consumption in most countries. The results also show that, in developed countries, alcohol is considered as a necessity by consumers and in developing countries it is considered a luxury. The cross-country average of income elasticities were 0.80 for developed countries and 1.13 for developing countries (see Table 8.15). The results also show that demand for alcohol is price inelastic irrespective of whether consumers are from developed or developing countries. The estimated average own-price elasticity of alcohol for developed and developing countries are very similar and are -0.57 and -0.61, respectively, with an overall cross-country average o f -0.59.
