The Dynamics of Alcohol Consumption in the Russian Federation: Implications of Using Price Related Policies to Control Alcohol Use

This dissertation models the dynamics of alcohol use in the Russian Federation with an emphasis on identifying policy implications most likely to be effective at controlling alcohol use. Utilizing data from The Russian Longitudinal Monitoring Survey, models of alcohol consumption are estimated using both myopic and rational specifications via ordinary least squares, fixed effects two stage least squares and, the focus of this study, two-step system generalized method of moments. Alcohol consumption is studied both as a composite good and as a distinct beverage category (wine, beer, and hard liquor). Furthermore, equations stratified by gender and rural status are included to better identify effects specific to relevant subgroups of the sample. Strong evidence of myopic addiction in both the overall sample and the stratified subgroups are identified. Even so, alcohol does seem to follow the law of demand within the myopic specification indicating that consumers will still react to changes in price. No evidence for rational addiction is found in either the complete sample or its subgroups. Results from the sample subgroups (male/female, urban/rural) were consistent with the overall pattern observed in the full sample, but differed in magnitude. This would suggest that, although alcohol consumption in individuals is affected by similar factors, regardless of gender or geography, the extent to which these individuals are affected differs. This reality would lend credence to targeted public health interventions for specific subgroups of individuals, rather than a one size fits all approach