December marks the start of the Christmas and holiday season in much of the world and celebration is often marked by the consumption of alcoholic beverages. The negative health effects of consuming too many alcoholic drinks are well documented and along with stricter laws on drinking and driving, the end result has been a decline in consumption over time – sometimes rather dramatically as illustrate in the most recent OECD Health Statistics. Yet the decline in average consumption masks some interesting patterns in the data. Looking at this data is a great way to mark the start of the weekend.
Median consumption of alcohol in the OECD in liters per capita rose from 6.7 liters in 1960 to peak at 12 liters in 1981 and then began to decline reaching 9.5 liters per capita in 2013 (See Figure 1). This approximately hump-shaped time trend with a peak in the late 1970s/early 1980s repeats itself across a number of countries. For example, Austria sees consumption rise from 9.3 liters in 1960 to 15.6 in 1973 and then starts a steady decline reaching 12.2 by 2012. Other OECD countries that exhibit this hump-shaped time trend include Belgium, Denmark, Germany, Greece, Hungary and Japan (See Figure 2).
Canada starts at 7 liters in 1960, reaches 10.9 in the late 1970s and then declines reaching 8 liters per capita in 2013. However, in Canada’s case, the overall decline from the late 1970s also contains a rebound in consumption from about 1997 to 2010. This rebound is of interest because other countries have also shown a rebound. For example, Australia starts out at 9.3 liters per capita in 1960 and rises to reach 13.1 liters by 1974. It then declines to 9.8 liters by 1995 and then starts to rise and peaks at 10.8 liters in 2006-07 before declining again to 9.9 by 2013 (See Figure 3). Other countries with this pattern include Poland, Sweden, and the United States.
Then there are countries that have simply seen an almost continuous decline. France and Italy for example have seen a steady linear decline (See Figure 4). France goes from 20.4 liters per capita in 1970 to 11.1 by 2013 while Italy goes from 19.2 liters per capita in 1961 to 6.1 by 2010. Other countries in this group include Chile, Luxembourg and Portugal.
Then there are OECD countries that have seen a pretty steady increase over time. For example, Mexico goes from 2.8 liters per capita in 1961 to reach 5.7 by 2012 while Iceland goes from 2.5 liters per capita in 1961 to 6.3 by 2010 (See Figure 5). Iceland takes a tumble after 2006 and one wonders if the drop in alcohol consumption was a leading indicator of the economic and banking crisis to come. Other countries in this group include Finland, Norway and the United Kingdom. As well, OECD “Partner” countries – namely Brazil, the Russian Federation, India and China (the Brics) also demonstrate an upward trend.
Of course, explaining these trends is the more interesting question. Economies experiencing rapid growth and development can be expected to increase their consumption intake in general – alcohol included. The decline that has affecting the traditional wine consuming countries of Europe has also been noted and probably reflects changing preferences and demographics. Then there is the countries that have seen a rebound after a period of decline such as Canada and Australia. One has to wonder if the resource boom and associated economic growth of the mid-1990s to the onset of the 2008-09 recession is a factor here.
Of course, given the patterns of growth and decline, what is interesting is that when one puts all the OECD countries together, what seems to be happening is convergence in alcohol consumption among the OECD countries (See Figure 6). From a much greater range in consumption volumes per capita in the 1960s, the OECD countries collectively appear to be undergoing a great moderation when it comes to imbibing.