Why do people drink? Tests of the rational addiction model
- 1 August 1995
- journal article
- research article
- Published by Taylor & Francis in Applied Economics
- Vol. 27 (8) , 727-736
- https://doi.org/10.1080/00036849500000062
Abstract
The rational addiction (RA) model applied to alcoho consumption is tested using 1983 US Health Interview Survey data. The RA model yields refutable hypotheses concerning effects of current, past, and future prices, past and future consumption, time preference and marginal utility of wealth on addictive good consumption. The estimations provide relatively strong support for the RA model. Past and present consumption had strong positive relationship with current consumption. Coefficients on past, present, and future money prices and fines for first oflence drunk driving (as a form of price for alcohol consumption) were significant and of the predical sign.Keywords
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