Why do people drink? Tests of the rational addiction model

Teresa M. Waters, Frank A. Sloan

Research output: Contribution to journalArticlepeer-review

44 Scopus citations

Abstract

The rational addiction (RA) model applied to alcohol 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 relationships with current consumption. Coefficients on past, present, and future money prices and fines for first offence drunk driving (as a form of price for alcohol consumption) were significant and of the predicted sign.

Original languageEnglish
Pages (from-to)727-736
Number of pages10
JournalApplied Economics
Volume27
Issue number8
DOIs
StatePublished - Aug 1 1995

ASJC Scopus subject areas

  • Economics and Econometrics

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