| Abstract: | This paper examines the determinants of household alcohol expenditures by using a nonnormal and heteroscedastic double-hurdle model to accommodate zero observations in the sample. The model is a generalization of the double-hurdle model estimated in previous studies of alcohol consumption. We also examine the effects of explanatory variables by calculating and decomposing the elasticities. Findings support the use of a more generalized error distribution. Income, region, education, and household demographics are among the significant determinants of alcohol expenditures. |
