Price and Income Elasticities of Demand for Alcoholic Beverages in Mozambique: Analysis Based on Household Consumption and Expenditure Survey (HBS 2019/20)

The consumption of alcohol and its impact on people's health and society is a topic of great interest to scholars, policy makers and the public. Numerous global studies have estimated the demand elasticity of price and income for alcoholic beverages, acknowledging the economic nature of alcohol as a commodity and its susceptibility to price and income factors. However, research conducted in Mozambique, on alcohol consumption, primarily examines vulnerable groups’ consumption patterns and perceptions of alcohol as a public health issue. The other focus of the studies is the prevalence of consumption in population. Therefore, as we know, there are no studies that focus on demand of alcohol beverages in Mozambique. The current study aims to contribute to fill this gap of information, contributing for a better understanding of the impact of prices and income on the consumption of alcoholic beverages in Mozambique, by estimating the demand elasticities based in four categories of alcoholic beverages (beer, wine, spirits and homemade beverages). The study used data from the fifth Household Consumption Expenditure Survey (HBS 2019/20) carried out by National Statistics Institute of Mozambique. The Almost Ideal AIDS Demand System (AIDS) and the Seemingly Unrelated Regressions (SUR) approaches were used to estimate the demand elasticities. The results reveal that the beer is price and income elastic, while other types of alcoholic beverages are price and income inelastic. Thus, the consumers of wine, spirits and homemade alcoholic beverages are much less sensitive to price and income variations than the consumers of beer.