The Price of Alcohol: A Consideration of Contextual Factors Alcoholism: Clinical and Experimental Research 30 (10) , 1734–1742
The current study considers the determinants of prices charged for alcoholic beverages by on-premise and off-premise outlets in Alaska.
Alcohol outlet densities, a surrogate measure for local retail competition, are expected to be negatively associated with prices while costs associated with distribution are expected to be positively related to prices. Community demographic and economic characteristics may affect observed local prices via the level of demand, retail costs borne by retailers, or the quality of brands offered for sale.
Outlet density per roadway mile was unrelated to price for both on- and off-premise establishments, either across or between beverage types. In contrast, overall distribution costs did appear to be related to alcohol price. The demographic and economic variables, as a group, were significantly related to observed prices.
More attention needs to be directed to the manner in which sellers and buyers behave relative to alcoholic beverages. Alcohol demand remains responsive to prices; yet, consumers have considerable latitude in determining the price that they pay for alcohol.
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