Price elasticity and income elasticity of beer demand in Mexico

Objective. Estimate the price and income elasticities of the demand for beer in Mexico. Materials and methods. Monthly series on beer sales and prices from 2007 to 2019 were used. Long-term elasticity was estimated using ordinary least squares (OLS).Short-term elasticity was estimated using a dynamic ordinary least squares (DOLS) model. Results. The price elasticity was in the long term of -1.40 (95%CI: -2.53 to -0.27) and -1.31 (95%CI: -2.46 to -0.15) in the short term. The income elasticity of demand in the long and short term was estimated at 0.86 (95%CI: 0.44-1.29 and 0.93 (95%CI: 0.51-1.34), respectively. Conclusions. The findings of this study suggest that fiscal policies may have a positive impact on the health of the population by reducing beer consumption.