Examining an alcohol consumption Kuznets curve for developed countries

Abstract

In this paper we expand the Simon Kuznets´ (1955) hypothesis to an "Alcohol consumption Kuznets curve", showing that as income rise, further resources become available to buy more alcohol. Hence, people consume more alcohol and alcohol consumption rates increase. Nevertheless, as income rises, individual health becomes a more recognized point of interest and people decrease their alcohol consumption levels in order to increase their health status. For a selection of OECD countries, we find empirical evidence that alcohol consumption is influenced by income, inequality, unemployment rates, life expectancy and therefore the business cycle. Moreover, the demographic structure (ageing and youth ratio) does not affect the alcohol consumption level