Tuesday, April 26, 2011

Beer Consumption and Economic Growth - or - Why I am Opening My Brewery in China

From Felix Salmon I learn of a paper by Liesbeth Colen and Johan Swinnen which looks at the correlation between income and beer consumption. Interestingly the authors find that the relationship is non-linear and in fact has an inverted U-shape suggesting that beer consumption rises with wealth, but then declines as richer consumers switch to things like wine and spirits.

The good news for brewers is this:

Beer consumption has been increasing steadily while the consumption of wine and spirits has been flat.  This, they argue is largely due to emerging economies like China increasing their consumption dramatically:

The USA 'aint doing badly either, by the way.  This is, of course good news for those that are in the business of making and selling beer (especially those in China) but it also suggests that the other shoe might fall as the emerging economies become high-income economies and switch their drinking habits to wine and spirits. 

By the way, as a counterpoint to the volume graph above, note the value of alcohol consumption:

So while the volume of beer has gone up, the prices of wine have increased while volumes have remained flat and this is even more true of other alcoholic beverages. 

NB: Inverted U's are a favorite of development economists - the Kuznets inverted U is a posited relationship between wealth and inequality and the environmental Kuznets inverted U is a posited relationship between wealth and environmental degradation. 


oakleyses said...

ugg outlet, giuseppe zanotti, birkin bag, iphone 6 case, north face outlet, uggs on sale, soccer jerseys, marc jacobs outlet, canada goose outlet, jimmy choo shoes, timberland shoes, asics shoes, ugg, soccer shoes, chi flat iron, mont blanc pens, lululemon outlet, ghd, moncler, p90x workout, reebok outlet, ugg soldes, uggs outlet, ferragamo shoes, celine handbags, ugg boots, moncler outlet, instyler ionic styler, insanity workout, beats headphones, mcm handbags, canada goose, new balance outlet, canada goose pas cher, north face jackets, moncler, herve leger, rolex watches, canada goose uk, canada goose outlet, wedding dresses, nfl jerseys, nike air max, hollister clothing, baseball bats, babyliss pro, valentino shoes, bottega veneta, moncler, canada goose outlet

Unknown said...

What's up, nice internet site you've got in here.
Buy Keflex Online

mia taylor said...

NIce piece of information.
MTP kit online

alexa said...

it was nice knowing great information.
Buy Abortion Pill Online

Admin said...

Great blog, keep sharing.
This helps combats chronic pains and anxiety situations
Order Concerta 54mg online helps to combat anxiety
Order captagon fenethylline
oxycontin 80mg for sale
Buy percocet 10/325mg
Buy vyvanse 30mg
Buy this recreational cannabis oil shatter to cure disorders you can as well whatsapp+14013083901 for more details

OnlineGenericPillRx said...

A piece of valuable information shared. Thank you for the post.

Order online MTP kit that is the first choice of the women to deal with an unwanted pregnancy.

OnlineGenericPillRx said...
This comment has been removed by the author.
genericsmartdrugs said...

GREAT POST, Thanks a lot for sharing nice information.
Buy Online Provigil USA

Lisa Bella said...

Great post, thank you so much for sharing such a valuable information with us.
People who are facing acute and chronic pain issues can buy online nucynta for treating the same.