CPR Working Paper Series No. 81
Rational Alcohol Addiction: Evidence from the Russian Longitudinal Monitoring Survey
Badi H. Baltagi
and Ingo Geishecker
April 2006
Abstract:
Alcohol
consumption in Russia is legendary and has been reported to be the third
leading cause of death in the former Soviet Union after heart disease and
cancer. Are Russian alcohol consumers rational addicts? This paper uses
eight rounds of a nationally representative Russian survey spanning the
period 1994-2003 to estimate a rational addiction (RA) model for alcohol
consumption. This is done in a panel data setting as well as on a wave by
wave basis. The profile of the Russian drinker and a huge difference between
males and females and the model is estimated by gender. We do not find
support for the RA model in Russia for women. For men, although we find that
some implications of the RA model are satisfied, we fail to endorse the
model empirically on grounds of implausible negative estimates of the
discount rate.
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