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Do beer and wine respond to price and tax changes in Vietnam? Evidence from the Vietnam Household Living Standards Survey
  1. Grieve Chelwa1,
  2. Pham Ngoc Toan2,
  3. Nguyen Thi Thu Hien3,
  4. Le Thi Thu4,
  5. Pham Thi Hoang Anh4,
  6. Hana Ross5
  1. 1 Graduate School of Business, University of Cape Town, Cape Town, South Africa
  2. 2 Invalids and Social Affairs, Ministry of Labour, Hanoi, Vietnam
  3. 3 Department of Economics, Thuongmai University, Hanoi, Vietnam
  4. 4 Healthbridge Foundation of Canada, Hanoi, Vietnam
  5. 5 SALDRU Research Affiliate, University of Cape Town, Cape Town, South Africa
  1. Correspondence to Dr Grieve Chelwa; grievechelwa{at}gmail.com

Abstract

Objective To provide the first ever published estimates of the price and expenditure elasticities of demand for beer and wine in Vietnam and thereby contribute to policy initiatives aimed at reducing the excessive consumption of alcohol.

Methods We use a linear approximation of the Almost Ideal Demand System and data from the Vietnam Household Living Standards Survey for 2010, 2012 and 2014.

Results We find that the demand for beer and wine in Vietnam is price and expenditure inelastic with average price elasticities of −0.283 and −0.317 and average expenditure elasticities of 0.401 and 0.156, respectively. That is, we find that beer and wine consumption decline whenever their respective prices increase and their consumption increases whenever expenditure rises.

Conclusions The results of the study lend confidence to calls for increased taxation of alcoholic products on public health grounds in Vietnam.

  • alcohol demand
  • deaton
  • expenditure surveys
  • price elasticity
  • Vietnam

This is an open access article distributed in accordance with the Creative Commons Attribution 4.0 Unported (CC BY 4.0) license, which permits others to copy, redistribute, remix, transform and build upon this work for any purpose, provided the original work is properly cited, a link to the licence is given, and indication of whether changes were made. See: https://creativecommons.org/licenses/by/4.0/.

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Footnotes

  • Contributors PNT did the analysis with the help of GC. NTTH, HR, LTT and PTHA helped with the writing of the manuscript.

  • Funding This work was supported by the International Development Research Centre grant number 107200-002.

  • Competing interests None declared.

  • Ethics approval This study did not require ethics approval as it uses the Vietnam Household Living Standards Survey which is a secondary dataset that is publically available.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • Data sharing statement The data contained in the article are publicly available from the General Statistics Office of Vietnam.

  • Patient consent for publication Not required.

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