To drink or not to drink: the microeconomic analysis of alcohol consumption in Russia in 2006-2010

The goal of this project is to investigate the influence of economic and social factors on the demand for alcohol in modern Russia. The regression models are estimated on the base of "The Russia Longitudinal Monitoring Survey (RLMS-HSE)" 1994-2011. There are three classic models of demand for alcohol (Becker & Murphy, 1988): the static, myopic and rational addiction models. We use a two-step estimation method because of the two-step consumer decision ("to drink or not to drink" and “how much to drink”). This allows us to distinguish between the factors influencing each decision separately. The contribution of this paper is to use as independent variables not only economic parameters (as prices and incomes of respondent and his\her family members) but also social characteristics such as educational level, gender, age, nationality, optimism level, alcohol use by other family members. The first results have demonstrated that some social factors (education, marital status, alcohol use by other family members) are more important than economic ones such as the price of alcohol