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Does drinking really decrease in bad times?

Christopher J Ruhm1, William E Black

  • 1Joseph M. Bryan School of Business and Economics, University of North Carolina at Greensboro, 27402-6165, USA. c_ruhm@uncg.edu

Journal of Health Economics
|July 31, 2002
PubMed
Summary

Economic downturns reduce overall alcohol consumption, primarily by decreasing heavy drinking. Light drinking may increase, and unemployment does not appear to drive this trend, suggesting income effects dominate.

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Area of Science:

  • Public Health
  • Health Economics
  • Epidemiology

Background:

  • Previous research using aggregate sales data suggested a procyclical relationship between economic conditions and alcohol consumption.
  • Understanding individual-level responses to macroeconomic shifts is crucial for public health interventions and economic policy.

Purpose of the Study:

  • To investigate the relationship between macroeconomic conditions and individual alcohol consumption patterns.
  • To determine whether changes in drinking behavior during economic fluctuations are due to existing drinkers altering consumption or individuals starting/stopping drinking.
  • To examine the differential impact of economic conditions on heavy versus light alcohol consumers.

Main Methods:

  • Utilized individual-level data from the "Behavioral Risk Factor Surveillance System" (BRFSS) spanning 1987 to 1999 interview years.

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  • Analyzed changes in drinking frequency and quantity in relation to macroeconomic indicators.

    • Main Results:

    • Confirmed the procyclical variation in overall alcohol consumption, consistent with prior aggregate data findings.
    • Found that economic downturns primarily reduce consumption among existing heavy drinkers, while light drinking slightly increased.
    • Observed no evidence of increased alcohol use among individuals who became unemployed during economic contractions.

    Conclusions:

    • The observed decrease in overall alcohol consumption during adverse economic periods is driven by reduced intake among heavy drinkers.
    • Economic factors, such as lower incomes, appear to exert a stronger influence on drinking behavior than potential stress-induced increases.
    • Findings suggest that public health strategies should consider the differential impact of economic conditions on various drinking populations.