Alcohol advertising and alcohol consumption by adolescents
Article first published online: 13 FEB 2006
Copyright © 2006 John Wiley & Sons, Ltd.
Volume 15, Issue 6, pages 617–637, June 2006
How to Cite
Saffer, H. and Dave, D. (2006), Alcohol advertising and alcohol consumption by adolescents. Health Econ., 15: 617–637. doi: 10.1002/hec.1091
- Issue published online: 18 MAY 2006
- Article first published online: 13 FEB 2006
- Manuscript Accepted: 4 NOV 2005
- Manuscript Received: 18 FEB 2004
- National Institute on Alcohol Abuse and Alcoholism to the National Bureau of Economic Research. Grant Number: R01 AA11851-02
This study investigates the effects of alcohol advertising on adolescent alcohol consumption. The theory of an industry response function and evidence from prior studies indicate the importance of maximizing the variance in advertising measures. Monitoring the Future (MTF) and National Longitudinal Survey of Youth 1997 (NLSY97) data are augmented with alcohol advertising, originating on the market level, for five media. The large sample of the MTF allows estimation of race and gender-specific models. The longitudinal nature of the NLSY97 allows controls for unobserved heterogeneity with state-level and individual fixed effects. Price and advertising effects are generally larger for females relative to males. Controls for individual heterogeneity yield larger advertising effects, implying that the MTF results may understate the effects of alcohol advertising. Results from the NLSY97 suggest that a 28% reduction in alcohol advertising would reduce adolescent monthly alcohol participation from 25% to between 24 and 21%. For binge participation, the reduction would be from 12% to between 11 and 8%. The past month price–participation elasticity is estimated at −0.26, consistent with prior studies. The results show that reduction of alcohol advertising can produce a modest decline in adolescent alcohol consumption, though effects may vary by race and gender. Copyright © 2006 John Wiley & Sons, Ltd.