Drinking during downturn: New evidence from the housing market fluctuations in the United States during the Great Recession

We investigate how the decline in home prices over the Great Recession in the U.S. impacted drinking behavior. We match data on actual and shadow home prices (from Zillow Research) to individuals' drinking behavior from the Behavioral Risk Factor Surveillance System (BRFSS) by county of residence and year/month of the interview. We improve upon the existing literature by using new measures of exogenous macroeconomic shocks captured by fluctuations in home prices and finding heterogeneous impacts of the downturn based on homeownership. We find that decline in home prices is commonly associated with increases in alcohol consumption, both on extensive and intensive margins. Additionally, we find that the effects are more consistent among homeowners compared to renters. Given that alcohol consumption is one of the leading causes of death in the U.S. and that the COVID-19 pandemic has triggered an economic crisis in many societies, the results have important public health implications.