Citation

Nelson JP. Appl. Econ. 2008; 42(7): 803-823.

Copyright

(Copyright © 2008, Informa - Taylor and Francis Group)

DOI

10.1080/00036840701720952

PMID

unavailable

Abstract

This article uses cross-country panel data to study the effects of advertising bans and other control policies on alcohol demand. The null hypothesis is that advertising bans do not decrease alcohol consumption. The study addresses several shortcomings in four previous cross-country studies. First, an explanatory variable is included for other alcohol control policies. Second, the study examines the history of advertising bans in OECD countries. Third, the study also examines differences in cross-country trends that characterize developed countries, including aging of the population, increased tourism, higher unemployment rates and increased consumption of wine. The Mediterranean wine-drinking countries are shown to be categorically distinct from the beer-drinking countries and Nordic spirits-drinking countries. Fourth, the study examines the panel data for unit roots and employs model specifications that correct for nonstationary data. The empirical results indicate a significantly negative effect for the control index and the alcohol price. Using alternative model specifications and estimation methods, the results indicate that advertising bans do not reduce alcohol consumption.