Convergence in Alcoholic Beverage Consumption Patterns among OECD Countries

Abstract

Abstract In this thesis, we test Stigler and Becker's identical tastes hypothesis using cross- country alcohol consumption data. Using several new measures of convergence, we rst explore trends in global consumption patterns since 1961. The data suggest that a major convergence has occurred in the alcohol consumption mix across countries, but at a slower pace in traditionally wine- and spirits-consuming countries. We then use the Rotterdam system demand model to test the Stigler and Becker hypothesis and determine whether a common demand equation can be used across the sample of 26 countries. Controlling for differences in income and beverage preferences, we test the hypothesis and the results suggest that the identical tastes hypothesis does not apply to alcoholic beverages.