DP15196 Persistence in alcohol consumption: evidence from migrants

Author(s):	Marit Hinnosaar, Elaine M. Liu
Publication Date:	August 2020
Date Revised:	September 2020
Keyword(s):	Alcohol, Geographic variation, migration, Regulation, taxes
JEL(s):	D12, I12, I18, L66
Programme Areas:	Industrial Organization
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=15196

How malleable is alcohol consumption? Specifically, how much is alcohol consumption driven by the current environment versus individual characteristics? To answer this question, we analyze changes in alcohol purchases when consumers move from one state to another in the United States. Right after moving, movers' alcohol purchases converge sharply toward the average level in their destination state, implying that the current environment explains about two-thirds of the differences in alcohol purchases. The adjustment takes place both on the extensive and intensive margin.