Elasticities of beer demand revisited

This paper uses U.S. aggregate beer consumption data from 1964–1992 to empirically estimate the elasticities of demand for beer. However, rather than assuming the behavioral parameters are time invariant, we estimate a gradual switching regression model that explicitly allows the elasticities to change over time. Results suggest that this more general model is warranted, as findings illustrate the importance of variable dynamics when evaluating the efficacy of proposed policy alternatives.