Price Elasticity of Alcohol Demand: A Meta-Analysis

The own-price elasticity is considered to be one of the key factors describing the demand for alcohol. There have been many estimates computed by now but only a few studies tried to analyse them. The aim of this meta-analysis is to discover more about the eventual effects that publication bias might have in the alcohol-related literature. The first part describes the various types of elasticities and the methods of estimation. This study is estimating the so called true effect elasticity in order to show how elastic the demand for alcoholic beverages is. As there are many ways how to estimate the elasticities it is also analysed if different approaches to the estimation lead to different results. The use of modern meta- analytical methods leads to significantly different results from the ones of previous meta-analyses. The estimated true effects yields new evidence that the demand for alcoholic beverages might be perfectly inelastic. Evidence of publication bias is quite strong and it appears that the economics research cycle hypothesis is also valid