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Fermi problem: booze

The series continues! How much money do Americans spend on alcohol?

320 million Americans, I say 3/4 of them are adults, 240 million. That probably bleeds into the 18-21 set, but hey, a bunch of them drink anyway.

How much do they drink? That's hard. People I know include teetotalers, having a beer or glass of wine every other night or 2 of 3, and dropping $20 at the bar every Sunday night, not to mention other drinking. But I note that if you drink at all regularly then it's easy to spend at least $10/week: a beer or two a night, a glass of wine a night, two $5 cocktails on the weekend, one $10 cocktail. $10/week is $500/year is $120 billion. $5/week gives $60 billion, $20/week $240 billion.

$40/week would be $6/day and is starting to feel too high to me, so $480 billion is a strong upper bound. Half of $5/week sounds like half the population not drinking at all and half drinking $5/week, which seems too low, so $30 billion is a strong lower bound.

We might try a more complex model, but e.g. if 1/3 don't drink, 1/3 drink $10, and 1/3 drink $20, that averages out to $10 for the lot and we're back at $120 billion.

Intrusion of actual data: a poll I saw a while back claimed that in fast 1/3 don't drink at all. If that's true, and if the other 2/3 drank at $10/week on average, that'd be $80 billion.

If 1/3 don't drink, 1/3 are casual at $5/week and 1/3 more serious at $15/week, that's $80 billion.

$20/week is $1000/year which is like 1/40th of the median household income though 1/20th of a two person household. Seems like people could be spending 5% of their income on booze. Check: $240 billion is less than 2% of GDP.

There's expensive wine out there, might it tilt the numbers? If 1% drink a $100 bottle of wine every night then that's $36,000/year and I don't believe this, the 1% aren't that rich. It would also be a total of $86 billion. I conclude the actual consumption of $100 wine is not going to be significant.

Okay, so we've got a wide range of $30-480 billion, a tighter one of $60-240 billion, and my gut instinct favoring upward of $120, except for that big 1/3 don't drink figure which pulls it down sharply.

That's my guesses. Care to try your own before reading further?


So, let me look stuff up.

http://www.bls.gov/cex/csxann10.pdf says $400 is spent... per "consumer unit" on alcohol. 2.5 people per unit, so $160/person. Well, 2 people over 18, so $200/adult. That gives about $50 billion.

http://money.msn.com/saving-money-tips/post.aspx?post=9113d6f5-1a32-4187-afb6-d7d5164df959 cites the same, and adds the money has shifted from retail to bars; this may simply reflect prices. Also "U.S. per capita consumption in 2009 was the equivalent of 2.3 gallons (8.7 liters) of pure alcohol, a lot less than the 2.76 gallons in 1981 but more than the 2.14 gallons in 1997."

http://www.drug-rehabs.org/alcohol-statistics.php is a lot more alarmist than the BLS and says $90 billion/year. No source is given.

http://articles.chicagotribune.com/2012-01-31/business/ct-biz-0131-liquor-export-20120131_1_liquor-sales-alcohol-sales-david-ozgo says "$59.24 billion alcohol industry. The data represents sales by manufacturers and importers, not retail sales" So consumers could be spending more at the bar and store (tax) but OTOH much of that number might be exports, too.

http://smallbusiness.chron.com/revenue-comes-selling-alcohol-34021.html says $90 billion but again gives no source... oh wait, list of references, which grounds out in this recovery site with no other references.

So, the most reliable seeming data is the BLS; unless there's a statistical mistake somewhere, we've got $50 billion, on the order of manufacturing sales, though it feels like that should be higher at the consumer level. $90 billion floats around rehab circles but has no good source.

Conclusion: $50 billion is outside my tight range though within the wide range. Americans drink a lot less than I thought, or drink much more cheaply than I thought. One of the sources repeated that only 65% say they drank in the past year, so $50 billion/160 million who drink = $312 per drinker, or $6/week. On the order of 4 bottles of beer on the weekend, or half a bottle of wine, or one cheap bottle, or 3 two-buck Chucks from Trader Joe's...

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Damien Sullivan

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