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Robust Demand Elasticities for Wine and Distilled Spirits: Meta-Analysis with Corrections for Outliers and Publication Bias*

Published online by Cambridge University Press:  20 November 2013

Jon P. Nelson
Jon P. Nelson*
Affiliation:
Department of Economics, Pennsylvania State University, University Park, PA 16802, email: [email protected]
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Abstract

This paper conducts a meta-analysis of price and income elasticities for wine and distilled spirits, which correct for outliers and publication bias. The sample of wine elasticities is obtained from 104 primary studies, and the sample of spirits elasticities is obtained from 111 primary studies. Robust weighted-means and meta-regressions are reported that correct for outliers, heterogeneity, heteroskedasticity, dependence, and publication bias. Compared to unweighted averages previously reported in the literature, the analysis yields less-elastic demands for both price and income. Average price elasticities obtained using cumulative meta-analysis are −0.45 for wine and −0.55 for spirits. Average income elasticities are 1.0 for both beverages. Bias due to publication selectivity is important. Country-level differences also are noted for both wine and spirits. Policy implications are discussed for pricing and taxation of alcohol beverages. (JEL Classifications: Q11, C18, I12)

Keywords

consumer demanddistilled spiritsmeta-analysiswine prices
Type
Articles
Information
Journal of Wine Economics , Volume 8 , Issue 3 , December 2013 , pp. 294 - 317
Copyright
Copyright © American Association of Wine Economists 2013 

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Footnotes

*

I am indebted to an anonymous referee for helpful comments and the International Center for Alcohol Policies (ICAP) for financial support. This paper presents the work product, findings, viewpoints, and conclusions solely of the author. Views expressed are not necessarily those of ICAP or any of ICAP's sponsoring companies.

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