ABSTRACT
This chapter examines the effects of a Catholic background on smoking and alcohol consumption because of their important links to health. The effect of income on the demand for alcohol and tobacco is less clear. If the price of alcohol or tobacco is increased through, an excise tax, the negative effect of the tax on demand should increase over time. There has been considerable research on the relationship between religion and alcohol consumption. It is well known that Catholics are more likely to drink alcohol than abstinence-oriented Protestants. Numerous economic studies show that price has a negative effect on smoking and drinking alcohol. Further, these studies suggest that the long-run price elasticity of demand for alcohol and tobacco. The state-level results thus suggest that Catholics consume more alcohol than non-Catholics. These results are not unexpected because Catholics are more likely to drink alcohol than non-Catholics.
