Beer Consumption in the Czech Republic and its Determinants

Abstract

The study identifies the main beer consumption determinants in the Czech Republic and quantifies their influence on the beer consumption. The analysis covers three areas - identification of the main determinants of Czech beer consumption, quantification of the influence of these factors on beer consumption, and examination of beer consumption forecasting possibilities. Time series of selected variables containing annual data of the 1994-2014 period are analysed. The main determinants are defined in accord with the general economic theory, their influence is measured using an econometric model, and quality of the model for prognostic purposes is verified using an ex-post prognosis. Based on empirical analysis, the price of lager beer, income, and influence of financial crisis were determined as the main determinants of Czech beer consumption. In addition, inelastic reaction of beer consumption on their changes was proven. The estimated model may be considered suitable for prognostic purposes. The Czech beer market and/or beer consumption in the examined period can be considered as specific, but stable.