Abstract
Heckman’s sample selection model was applied to data from the Malaysian Household Expenditure Survey 2004/2005 to examine the factors influencing the likelihood of purchasing and the amount spent on alcohol in Malaysia. Results of the marginal effects suggest that while socio-demographic factors are important determinants of household purchase decisions and expenditure levels on alcohol in Malaysia, the effects vary across ethnic groups. Specifically, although education had a significant but modest impact in reducing the probability of alcohol purchases and expenditure levels among ethnic Chinese households, this effect was not evident among the ethnic Indians and other races. While increasing household size lowered the likelihood of purchasing alcohol and its expenditure levels for all ethnic groups, the reinforcing effects of both income and gender were relevant only for ethnic Chinese and Indian households. Last, urban Indian households were less likely to purchase alcohol and spend less compared to rural Indian households.
Similar content being viewed by others
Notes
As of December 2008, the exchange rate was approximately US $1.00 = RM3.55 or RM1.00 = US $0.28.
A comprehensive discussion of the characteristics of the respondents can be obtained from the authors.
Parameter estimates for all samples are available upon request.
References
Abdel-Ghany, M., & Wang, M. Q. (2003). Contemporaneous and intertemporal relationship between the consumption of licit and illicit substances by youth. Journal of Family and Economic Issues, 24, 281–289.
Amemiya, T. (1985). Advanced econometrics. Cambridge, MA: Harvard University Press.
Assunta, M. (2001a). The alcohol problem in Malaysia. The Globe Special Issue 4. Global Alcohol Policy Alliance, 2001–2002.
Assunta, M. (2001b). The impact of alcohol consumption on Asia. The Globe Special Issue 4. Global Alcohol Policy Alliance, 2001–2002.
Brandon, P. D. (2000). Child care utilization among working mothers raising children with disabilities. Journal of Family and Economic Issues, 21, 343–364.
Cheng, H., & Capps, O., Jr. (1988). Demand analysis of fresh and frozen finfish and shellfish in the United States. American Journal of Agricultural Economics, 70, 533–542.
Chi, P. S. K., & Hsin, P. L. (1999). Medical utilization and health expenditure of the elderly in Taiwan. Journal of Family and Economic Issues, 20, 251–270.
Confederation of Malaysian Breweries Berhad. (2007). Beer & stout industry—facts and figures: Taxes & excise duties. Kuala Lumpur, Malaysia. Retrieved October 20, 2008 from http://www.malaysianbrewers.com.my.
Craig, L. (2007). How employed mothers in Australia find time for both market work and child care. Journal of Family and Economic Issues, 28, 69–87.
Department of Statistics Malaysia. (2000). Population and housing census of Malaysia 2000. Putrajaya, Malaysia: Department of Statistics Malaysia.
Department of Statistics Malaysia. (2005). Household expenditure survey 2004/2005. Putrajaya, Malaysia: Department of Statistics Malaysia.
Fusaro, M. A. (2008). Hidden consumer loans: An analysis of implicit interest rates on bounced checks. Journal of Family and Economic Issues, 29, 251–263.
George, S., & Chin, C. N. (1998). A 3-year case study of alcohol-related psychotic disorders at Hospital Seremban. The Medical Journal of Malaysia, 53, 223–226.
Gius, M. P. (2005). An estimate of the effects of age, taxes, and other socioeconomic variables on the alcoholic beverage demand of young adults. Social Science Journal, 42, 13–24.
Greene, W. H. (2007). Econometric analysis (6th ed.). New York: Prentice Hall.
Harris, M. N., Ramful, P., & Zhao, X. (2006). An ordered generalised extreme value model with application to alcohol consumption in Australia. Journal of Health Economics, 25, 782–801.
Hatcher, C. B. (2002). Wealth, reservation wealth, and the decision to retire. Journal of Family and Economic Issues, 23, 167–187.
Heckman, J. (1979). Sample selection bias as a specification error. Econometrica, 47, 153–161.
Hoffman, R., & Kassouf, A. L. (2005). Deriving conditional and unconditional marginal effects in log earnings equations estimated by Heckman’s procedure. Applied Economics, 37, 1303–1311.
Jianakoplos, N. A., & Bernasek, A. (2008). Family financial risk taking when the wife earns more. Journal of Family and Economic Issues, 29, 289–306.
Jones, A. S. (2002). Wage and non-wage compensation among young alcoholic and heavy drinking women: A preliminary analysis. Journal of Family and Economic Issues, 23, 3–25.
Manrique, J., & Jensen, H. H. (2004). Consumption of tobacco and alcoholic beverages among Spanish consumers. Southwestern Economic Review, 31, 41–56.
Ministry of Health Malaysia. (2006). Malaysia NCD surveillance 2006: NCD risk factors in Malaysia. Putrajaya, Malaysia: Ministry of Health Malaysia.
Nayga, R. M., Jr. (1996). Sample selectivity models for away from home expenditures on wine and beer. Applied Economics, 28, 1421–1425.
Nayga, R. M., Jr., & Capps, O., Jr. (1994). Analysis of alcohol consumption in the United States: Probability and level of intake. Journal of Food Distribution Research, 25, 17–23.
Pan, S., Fang, C., & Malaga, J. (2006). Alcoholic beverage consumption in China: A censored demand system approach. Applied Economics Letters, 13, 975–979.
Ramful, P., & Zhao, X. (2008). Individual heterogeneity in alcohol consumption: The case of beer, wine and spirits in Australia. The Economic Record, 84, 207–222.
Rosaida, M. S., & Goh, K. L. (2004). Gastro-oesophageal reflux disease, reflux oesophagitis and non-erosive reflux disease in a multiracial Asian population: A prospective, endoscopy based study. European Journal of Gastroenterology and Hepatology, 16, 495–501.
Sharpe, D. L., Abdel-Ghany, M., Kim, H., & Hong, G. (2001). Alcohol consumption decisions in Korea. Journal of Family and Economic Issues, 22, 7–24.
Tobin, J. (1958). Estimation of relationships for limited dependent variables. Econometrica, 26, 24–36.
Tomohara, A., & Lee, H. J. (2007). Did state children’s health insurance program affect married women’s labor supply? Journal of Family and Economic Issues, 28, 668–683.
Weagley, R. O., Chan, M. L., & Yan, J. (2007). Married couples’ time allocation decisions and marital stability. Journal of Family and Economic Issues, 28, 507–525.
White, H. (1982). Maximum likelihood estimation of misspecified models. Econometrica, 50, 1–25.
White-Means, S. I., & Rubin, R. M. (2004). Trade-offs between formal home health care and informal family care giving. Journal of Family and Economic Issues, 25, 335–358.
Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. Cambridge, MA: MIT Press.
World Health Organization [WHO]. (2007). Global alcohol database: Data on alcohol and alcohol-related problems. Retrieved July 20, 2008 from http://www.who.int/research/en.
Yen, S. T. (1994). Cross-section estimation of US demand for alcoholic beverage. Applied Economics, 26, 381–392.
Yen, S. T. (2005). A multivariate sample-selection model: Estimating cigarette and alcohol demands with zero observations. American Journal of Agricultural Economics, 87, 453–466.
Yen, S. T., & Jensen, H. H. (1996). Determinants of household expenditures on alcohol. Journal of Consumer Affairs, 30, 48–67.
Yen, S. T., & Rosinski, J. (2008). On the marginal effects of variables in the log-transformed sample selection models. Economics Letters, 100, 4–8.
Zhao, X., & Harris, H. H. (2004). Demand for marijuana, alcohol and tobacco: Participation, levels of consumption and cross-equation correlations. The Economic Record, 80, 394–410.
Acknowledgement
Research support from the Universiti Sains Malaysia short-term grant (304/PSOSIAL/637038) is acknowledged.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Tan, A.K.G., Yen, S.T. & Nayga, R.M. Factors Affecting Alcohol Purchase Decisions and Expenditures: A Sample Selection Analysis by Ethnicity in Malaysia. J Fam Econ Iss 30, 149–159 (2009). https://doi.org/10.1007/s10834-009-9148-9
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10834-009-9148-9