Home Bias in U.S. Beer Consumption

We apply the Berry, Levinsohn, and Pakes (1995) market equilibrium model to data from 30 brands of beers sold in 12 U.S. cities over 20 quarters (1988-92) to estimate the consumers’ taste for beer characteristics (price, alcohol content, and calories) as well as for the cultural region of origin (USA, Anglo-European, Germanic, and countries bordering the U.S.). Consumer heterogeneity is allowed with respect to age and income. Overall we end up with 7,200 beer brand observations (30x12x20) and 13,920 (58 random draws x 12 x 20) consumer observations. Empirical results indicate that indeed there is home bias with respect to foreign beers. Home bias is less accentuated among older and more affluent individuals.


Issue Date:
2011-08
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/148292
Total Pages:
15
JEL Codes:
D12; F14; L66
Series Statement:
Working Papers
004




 Record created 2017-04-01, last modified 2017-10-18

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