Does drinking really decrease in bad times?

This paper investigates the relationship between macroeconomic conditions and drinking using individual-level data from 1987 to 1999 interview years of the "behavioral risk factor surveillance system" (BRFSS). We confirm the procyclical variation in overall drinking identified in previous research using aggregate sales data and show that this largely results from changes in consumption by existing drinkers, rather than movements into or out of drinking. Moreover, the decrease occurring during bad economic times is concentrated among heavy consumers, with light drinking actually rising. We also find no evidence that the decline in overall alcohol use masks a rise for persons becoming unemployed during contractions. These results suggest that any stress-induced increases in drinking during bad economic times are more than offset by declines resulting from changes in economic factors such as lower incomes.