Alcohol abuse and economic conditions: evidence from repeated cross-sections of individual-level data

This study presents novel evidence on the relationship between macroeconomic conditions and patterns of alcohol consumption. Prior research has suggested that alcohol abuse varies procyclically, implying that income effects dominate any drinking patterns related to the opportunity cost of time or the psychological stress of recessions. However, those inferences have been based either on aggregate measures of consumption volume or possibly confounded cross-sectional identification strategies. This study examines these issues by evaluating detailed consumption data from the more than 700 000 respondents who participated in the Center for Disease Control and Prevention's Behavioral Risk Factor Surveillance System (BRFSS) surveys over the 1984-1995 period. The results provide robust evidence that the prevalence of binge drinking is strongly countercyclical. Furthermore, even among those who remain employed, binge drinking increased substantially during economic downturns. This combination of results suggests that recession-induced increases in the prevalence of binge drinking do not simply reflect an increased availability of leisure and may instead reflect the influence of economic stress.