Modelling the alcohol consumption patterns of australian households

Consumers allocate their budget in two stages. Firstly to broad commodity groups and then the group budget to commodities within each group. Conditional demand analysis provides in-depth insights on the second stage budget allocation. Using the Conditional Generalised Working's Model, we analyse the Australian alcohol demand at two stages, namely total alcohol and alcohol sub-groups: beer, wine, spirits and others using the latest ABS HES 2015–2016 data. The results show that there are noticeable differences in Australian alcohol consumption patterns at the disaggregated level by states, household location, income groups, gender and age. In general, beer and spirits are luxuries while wine and others are necessities.