Title: Economic determinants of wine consumption in Thailand

Authors: Jordan French

Addresses: Faculty of Business Administration, Stamford International University, Thailand

Abstract: The focus of the study is economic (income), substitution and price effects. To limit effects in sociodemographic changes, the data spans the recent period of 2007 to 2014. The study finds using correlations and regressions to obtain the elasticities, that local wine is an inferior good, imported wine is a luxury good, imported wine and beer are substitutes, demand for local wine is fairly price sensitive (elastic), and demand for imported wine is not sensitive to price increases (inelastic). The research also analyses policy implications based on the elasticities for reducing alcohol consumption, switching consumers between wine and beer for health reasons, increasing government revenues and protecting local wineries. This study finds that the current tariff system on imported wines does not help local producers but is intended for interests in the beer industry and/or a source of government revenue.

Keywords: wine industry; demand; elasticities; public policy; taxation; Thailand; economic determinants; wine consumption; income effects; substitution effects; price effects; local wine; imported wine; beer industry; price increases; alcohol consumption; public health; government revenues; local wineries; tariffs.

DOI: 10.1504/IJEBR.2016.081229

International Journal of Economics and Business Research, 2016 Vol.12 No.4, pp.334 - 347

Received: 09 Aug 2016
Accepted: 05 Oct 2016
Published online: 29 Dec 2016 *

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