Economic Determinants of Wine Consumption in Thailand

The focus of the study is economic (income), substitution, and price effects. To limit effects in sociodemographic changes, the data spans the recent period of 2007 to 2014. The study finds using correlations and regressions to obtain the elasticities, that local wine is an inferior good, imported wine is a luxury good, imported wine and beer are substitutes, demand for local wine is fairly price sensitive (elastic), and demand for imported wine is not sensitive to price increases (inelastic). The research also analyzes policy implications based on the elasticities for reducing alcohol consumption, switching consumers between wine and beer for health reasons, increasing government revenues, and protecting local wineries. This study finds that the current tariff system on imported wines does not help local producers but is intended for interests in the beer industry and/or a source of government revenue