An Examination of the Cross-Price Effects of Alcohol and Cigarettes
Date
2015
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Haverford College. Department of Economics
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Thesis
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Award
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eng
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Open Access
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Abstract
My thesis analyzes the cross-price effects of alcohol and cigarettes on different subpopulations. Specifically, I use a linear probability model to look at the change in the probability that a person drinks, smokes, drinks excessively and drinks moderately in response to a change in the price of beer, wine, and cigarettes. I also use OLS regression to look at the change in the average number of drinks per drinking occasion and the average number of drinks per month in response to a change in the price of beer, wine, and cigarettes. Results suggest that beer is a complement to cigarettes, whereas cigarettes are a substitute for alcohol. Additionally, I find that wine is a substitute for cigarettes.