Alcohol beverage price spectra: opportunities for substitution

This study examines the range of beer, wine, and spirits prices in the State of California using data from a survey of on- and off-premise retail establishments. It is argued that alcohol price is best understood in terms of spectra, which reflect the range of available prices rather than individual price indices. Specific findings indicate that most price variability is due to premise type and beverage-by-premise-type interactions. Smaller effects on price are found for brand and geographical region as indicated by area code. The implications of these findings for future research into the demand for alcohol are discussed.