National Bureau of Economic Research Essay

Go to the National Bureau of Eco nary(prenominal)ic enquiry (NBER) Web site, http//www. nber. org, and select New operative Papers. In the Google search space, emblem alcoholic beverage. Use the titles and summaries of the makeups to answer the following caputs relating to snapshot(a) Do the amiablely sickly mother perfectly springless demands for cigarettes and alcohol? Elasticity helps us define the relationship of changes in price and incomes to the effect of supply and demand. The question posed is do the mentally ill have perfectly inelastic demands for cigarettes and alcohol?First, we must define what perfectly inelastic demand is. As defined by our textbook, a perfectly inelastic demand is angiotensin converting enzyme in which price change results in no change any(prenominal) in the quantity demanded. This is further defined as an extreme case. afterwards reading a paper written by total heat Saffer and Dhaval Dave in 2002, the conclusions were rather convincing. When mental illness is non factored into price elasticity for cigarettes and alcohol, it is determine that raising the price of these addictive goods go away lower the demand for them.The paper shows that mental illness raises the drug addiction of these addictive goods by 94% and 25% respectfully. Further, the test for elasticity was performed with this specific group in mind. It was determined that mental illness had no substantive effect on the price elasticity of cigarettes and alcohol. With this in mind it is easy to draw the conclusion that the mentally ill do not have perfectly inelastic demands for cigarettes and alcohol. interview Working paper 8699 Mental Illness and the demand for alcohol, cocaine and cigarettes by Henry Saffer and Dhaval Dave.b) Does alcohol consumption increase in drab times? before reading this article and looking at the question presented in attend does alcohol use increase in bad times? you would cursorily determine that logically the answ er is yes. With simple knowledge of alcohol inlet one would be provoked to think alcohol in bad times can be used as self-medication to the lack of income. We have all seen that famous scene where a stressed individual will order numerous shots of hard liquor to ease their sorrow, but that with all that simple knowledge the answer to the question is actually no.By the research through with(p) in this paper by Christopher. J Ruhm he brings to light that alcohol intake doesnt have a positive increase in bad times instead it has a decline in consumption. He uncovers that heavy drinkers decrease quite a lot with the loss of income, and that even recreational and binge drinking declines as well though at a smaller pace. As a whole, alcohol consumption doesnt increase during bad times overall. Reference Working paper 8511 Does Drinking Really Decrease in corked Times?By Christoher Ruhm and William Black(c) What is the effect of cigarette taxes (and export) on the consumption of alcoh ol? What does that imply about the cross elasticity of demand among the two? Tax implications and its effect on alcohol consumption were examine in detail in working paper 8962. This study was done in Canada. What the writer base was that higher tax rates for cigarettes wouldnt stimulate alcohol consumption as a replacement habit. When smuggling was factored into the equation, it was found that in Canadian smuggling could have increased both cigarette and alcohol consumption.After analyzing the data with two different data sets and trying to determine cross elasticity, the first analysis determined that cigarettes and alcohol were complimentary, as cigarette consumption decreased, so did alcohol consumption, when smuggling is not factored. However, when a different data set is used, the FAMEX data, then the two were found to be independent. This forced the writer to concede that no conclusion could be drawn on the subject at the time, but that the writer could come together tha t alcohol is not a substitute of cigarettes.