Availability and Sales of Alcohol in Four Canadian Provinces: A Time-Series Analysis

Abstract

The research question addressed in the present study, with ARIMA time-series analyses, was the extent to which changes in economic and physical availability had an effect on sales of alcohol in four Canadian provinces during the second half of the 20th century. The annual sales, by type of beverage (spirits, wine and beer) as well as total sales, measured in pure alcohol per inhabitant age 15 and above in each province, were used as dependent variables in the analyses. The inhabitants' real disposable income, the real price of alcohol, and the number of on- and off-premise outlets per 100,000 inhabitants were used as independent variables. All the time-series were differenced to remove long-term trends. The main study period was 1951–2000. In some of the analyses the study periods were shorter, primarily due to lack of data. Changes in economic availability in general, and in price in particular, had larger effects on sales than physical availability. Among the beverages analyzed in the study, the demand for spirits was most sensitive to changes in availability. Economic availability had a greater effect on sales than the number of outlets. However, one might question to what extent the number of outlets really is a feasible measure of transaction costs associated with purchases of alcohol.