Post on 06-Apr-2018
8/2/2019 Economics 490 Beer and Recessions
1/36
1
Beer and Recessions: An Investment Analysis of Beer During the Great Recession of 2007-2010
UBC
Economics 490
Abstract
This paper examines the investment durability of beer stocks during pronounced economic downturns,
specifically the major worldwide recession that struck following the US mortgage crisis of 2007. Analysis
is focused on the performance of leading brewers relative to aggregate market indicators and the regional
impact of the recession. Using monthly data from 6 different stock prices, 3 different indices, and two ex-
change rates over nearly 5 years, the paper attempts to break the investment behavior of brewer stocks
down into their normal and recessionary components.
8/2/2019 Economics 490 Beer and Recessions
2/36
2
8
I. Introduction
The study of economics, to its own great misfortune, is confined to the study of that which has already
happened. For those of us interested in economics who wish to ask new questions and find new an-
swers, this means that we need to scour situations from the past that are both appropriate to our question
and sporting sufficient data. The appropriate situations are often tough to find; the data however, is forev-
er harder. In the way that it is hard to study the rain on a sunny day, it is hard to study the effects of re-
cessions in a bull market. The recent great global recession that took root in 2007 has provided us with a
fantastic platform to ask many recession-based questions in models utilizing nearly current 21st century
data.
8/2/2019 Economics 490 Beer and Recessions
3/36
1
Anyone holding investments through a recession will, without question, be interested in how well those in-
vestments may fare during the slow down. In a more future focused tone, they would like to know what
kind of investments would best weather the storm next time a recession shows up to threaten their hold-
ings. Borrowing some environmental motivation from the various service industry jobs I have worked dur-
ing my university career, this recession provided a ripe occasion to test the common investment adage
that, beer is recession proof. It is a saying that I have heard people talk about for years now, with inter-
esting arguments both for and against.
Expanding upon this personal motivation is an even more commanding economic one is beer a risk-free
investment during recessions? If it is so, or even partly so if beer-based investments are notably lower-
risk than the average during economic downturns then this gained insight could be massively beneficial
to those planning their portfolios. Especially following a recession such as that which we have just
emerged, one in which countless people lost huge sums of money, the discovery a decent protection
against these kinds of market wide losses would be exciting, at the very least. So, the important question
becomes: how does beer function, as an investment vehicle, relative to the rest of the market during a pe-
riod of recession? And herein lies my aim with this paper, to assess the notion that beer may be reces-
sion-proof.
II. Reviewing the Literature
8/2/2019 Economics 490 Beer and Recessions
4/36
2
8
Surrounding the topic of beer and economics there is a significant amount of literature. Stemming from
interests in consumption, abuse, policy, investment, and psychology, the research is often varied in intent,
if not also in results. A commonly addressed theme amongst this host of studies is the concept that either
beer consumption or sales or both may behave in a manner not consistent with a normal, pro-cyclical
good.
In a paper focused on the abuse and policy implications of drinking during economically volatile times,
Cook and Moore (2002) look closely at the ties between economic performance and heavy or abusive
drinking patterns. Although their analysis is quite broad, many of their more interesting findings are cen-
tered on the nuanced effects that can be seen when heavy drinkers encounter heightened financial hur-
dles (a rise in the real cost of alcohol, whether through lost wages or increased price). In general, they
find that alcohol is no exception to the economic law of downward-sloping demand1. However, more
specifically they find that consumption levels are sticky for heavy drinkers, implying that a temporary eco-
nomic decline, as found in a recession, would have little effect on the habits of those with high rates of
consumption. They also note that short run behavior of drinkers from all consumption levels may be resis-
tant to their long run findings of pro-cyclical behavior during downturns. It is possible, they consider, that
many consumers may actually only change their specific choice of what and where to have drinks during
short-term economic disruptions; a transfer of purchases from bars and restaurants to retail outlets com-
bined with a shift towards alcoholic beverages with higher ethanol content could effectively smooth con-
sumption when faced with temporarily higher real costs.
1 Cook and Moore (2002), pg. 130
8/2/2019 Economics 490 Beer and Recessions
5/36
1
Diverging from the harm and policy aspects of Cook and Moore (2002), Bentzen and Smith (2004) look at
the relationship that alcohol consumption has with business cycles. By studying consumption rates and
GDP per capita in several Scandinavian countries (Norway, Denmark, and Sweden) over an extended
time series, they are able to evaluate consumption patterns over the course of many business cycles.
Their analysis is broken into separate groups for each of beer, wine, and spirits; however, their results are
identical for all of them alcohol displays significant short run elasticity to income and is a normal, pro-
cyclical good.
Krger and Svensson (2008) have essentially identical findings when looking just at long run data from
Sweden. In a finding that directly supports the sticky behavior posited by Cook and Moore (2002), they
conclude that alcohol sales are a long memory process2.
Perhaps the most extensive piece of literature that I examined was by Freeman (2009). Clearly specified
in the second section, The main focus of this paper is the responsiveness of beer demand to the busi-
ness cycle3. In introducing his state level analysis of drinking in the US, Freeman appraises the popular
arguments about alcohol consumption along three separate channels: 1) consumption; 2) investment; and
3) psychology. Reporting first on alcohol as a consumption good, he states that the convention wisdom
in the economics literature is that alcohol is a procyclical normal good4. This is a particularly interesting
2 Krger and Svensson (2008), pg. 8
3 Freeman (2009), pg. 5
4 Freeman (2009), pg. 2
8/2/2019 Economics 490 Beer and Recessions
6/36
2
8
review given his note on the following page that he personally in past work found no evidence of
short-run cyclical response of beer to economic variables5. As possibly confusing as those counter
claims are, his continued talk about the investment and psychology behind beer only manage to further
obscure the consensus. Psychologically speaking, he finds that stress and addiction provide strong ar-
guments for alcohol as a counter-cyclical good. On the investment side however, we are informed that,
the prevailing view from the investment side is that the beer industry is recession-proof or acyclical6.
Referencing Ahrens (2004)7, Freeman tells us that the stocks of American alcoholic beverage companies
rose by 46.02% during the five year period that saw the bursting of the dot-com bubble, the recession of
2000-2001, and the tragedy of the 11-September-20016, all while the S&P 500 lost 14.05%. Following
this discussion of the mixed literature, Freeman ironically goes on to show beer in much the same way as
the other economic literature does, as a pro-cyclical, normal good that is sensitive to excise taxes and
price6.
Almost as telling as that which I was able to discover, was that which I was not. None of the literature ex-
tensively focused on the investment response of a sharp economic downturn. Several talked about beer
during a slowdown, but none more pronounced that the lows of a standard business cycle. The only ex-
ception to this was Freemans fleeting reference to Ahrens book. Unexpectedly to me, the question of al-
cohols recession durability appears not to have been studied very extensively yet in academia. This real-
ization furthered my motivation to explore the topic at hand.
5 Freeman (2009), pg. 3
6 Freeman (2009), pg. 2
7 Ahrens, Dan (2004), Investing in Vice: The Recession-Proof Portfolio of Booze, Bets, Bombs, and Butts
8/2/2019 Economics 490 Beer and Recessions
7/36
1
III. Methodology
In advancing my understanding of beer and its investment potential during recessions, I will examine the
investment value of beer relative to other holdings. Whenever talking about investment values and mar-
kets, the discussion almost inevitably converges upon stock markets and their explicit function as invest-
ment middle-men. Using stock prices and their movements as a measure of performance, I will compare
the performance of beer companies to that of the market at large during our recent worldwide recession.
With beer investment values as the dependent variables and various market indicators as the indepen-
dent variables, I will use linear OLS regressions to analyze the data. Lag variables for each independent
variable will be used and tested in preliminary regressions. Those that display adequate statistical signifi-
cance will be kept for the final regressions. The data itself will be subdivided into that which occurs before
the downturn and that which occurs during and slightly after. Using approximately half of the data before
and half after the split, I will be able to look at the behavior of beer investments under normal conditions
(period 1) and under recessionary conditions (period 2). This way, the pro- versus counter- versus a-cycli-
cal behavior of a stock found under regular conditions can be directly compared with its behavior during a
recession. Any defensiveness of a stock during the recession or any change in elasticity between periods
should come up in the coefficients following statistical analysis. Additionally, the lag variables, if signifi-
cant, will inform us if the investments have sticky responses to any of the independent variables.
8/2/2019 Economics 490 Beer and Recessions
8/36
2
8
a. The Data
My dataset is a collection of stock prices, index prices, and currency exchange rates spanning from July
2005 to February 2010. Once the data has been spliced to accommodate the two different periods, we
are left with 26 times series points from July 2005 to Aug 20078and 30 times series points from Sept
2007 to Feb 2010. Individual data points were taken on a monthly basis from a total of six different stocks,
three market indices, and two relevant exchange rates. This results in a total of 616 observations before
statistical manipulation.
i. Dependant Variables
The dependent variables are made up of the stock prices of three leading brewers each from the Euro-
pean marketplace and the Tokyo Stock Exchange. Each brewer was selected for its status as a market
leader in its own exchange, its own region, and even the entire world. Also important in the selection was
an absence of major mergers in the relevant time frame events that would have lent unrepresentative
volatility to the model. In the European market, Anheuser-Busch Inbev of the Euronext: Brussels Ex-
change, SABMiller plc of the London Stock Exchange, and Heineken N.V. of the Euronext: Amsterdam
Exchange were selected in accordance with these requirements. Similarly, from the Tokyo Stock Ex-
change we have Sapporo Holdings Limited, Asahi Breweries LTD, and Kirin Holdings Company LTD. Re-
spectively, the ticker symbols for these six are: EBR:ABI, LON:SAB, AMS:HEIA, TYO:2501, TYO:2502,
and TYO:2503. Data for the European three was taken collectively from the Share Monitor on AB-Inbevs
8 Only 26 monthly data points were possible in the first period data set as breaks in the data sets begin to appear pri-
or to that initial July 2005 point.
8/2/2019 Economics 490 Beer and Recessions
9/36
1
Corporate site9 while the points for the Asian three were taken individually from their particular pages on
Google Finance10. For consistency, the price taken for each beer stock was that at closing on the first day
of trading in each month.
ii. Explanatory Variables
As explanatory variables, I chose one market index for each of the two regions that was not only well rec-
ognized, but also representative of the market as a whole. In accordance with this, the Nikkei 225 and the
MSCI: Europe were chosen. Similar to the stock prices above, the data points chosen were those closing
out the first day of trading in each month. Data for the Nikkei 225 was collected from Yahoo Finance11
while the points for the MSCI: Europe were collected from the AB-Inbev site together with the European
stock prices.
Being mindful of the United States role as the catalyst and major influence in this recent recession, it was
pertinent to also look at variables that would benchmark the aggregate US market and that would il lus-
trate the relative effect of the US on each region. Again chosen as an index with a broad grasp of the
market, the NYSE Composite Index (NYSE:NYA) was taken to represent a US aggregate. Unlike all data
previously introduced, the price taken for the NYSE Composite index was that at the opening of the first
trading day of the month. This was done for the ease it provided over closing prices in terms of data re-
9 Anheuser-Busch Inbev: Investors,
10Google Finance Beta,
11 Yahoo! Finance,
http://www.ab-inbev.com/go/investors/share_information/share_monitor.cfmhttp://www.ab-inbev.com/go/investors/share_information/share_monitor.cfmhttp://www.google.com/financehttp://www.google.com/financehttp://finance.yahoo.com/http://finance.yahoo.com/http://www.google.com/financehttp://finance.yahoo.com/http://www.ab-inbev.com/go/investors/share_information/share_monitor.cfm8/2/2019 Economics 490 Beer and Recessions
10/36
2
8
trieval. It should be noted that I assume little statistical error should result from this irregularity given the
inherent long-term trending of my data together with the minimal intraday variance of prices and the con-
sistency of time-of-day choices within the variable. These data points were taken from all Yahoo Finance.
Accounting for the relative effect of the US on the European and Asian markets respectively, I used the
Euro per USD and Yen per USD exchange rates. The data for these, collected from FreeLunch.com12, is
an average of the daily exchange rates for the month previous to stock and index prices. That is, for a de-
pendent variable stock price taken on 1 July 2007, the independent exchange rate variable would be an
average of the daily values for June 2007. Again noting the statistical inconsistency as with the NYSE
Composite this was done with an intention of easing data retrieval. Since these values are averages,
they should still effectively represent the exchange rate as an independent variable.
iii. Preparation
Prior to doing any actual statistical analysis, the data needed to be organized and prepared in order to
maximize the cogency of the results. Due to the varying magnitudes of the variables, both dependent and
independent, all data has been normalized using the July 2005 data points as a base. This allows for an
analysis in which the resulting coefficients will be easier to understand and discuss. In addition, the nor-
malization makes possible the creation of aggregate dependent variables that preserve relative perfor-
12 FreeLunch, < http://www.economy.com/freelunch/default.asp>
http://www.economy.com/freelunch/default.asphttp://www.economy.com/freelunch/default.asp8/2/2019 Economics 490 Beer and Recessions
11/36
1
mance movements in the independent stocks13. I created a normalized aggregate dependent variable of
this type for each of the European and Asian markets. They are in turn re-normalized to a value of one at
time=0 (1 July 2005).
iv. Basic Statistics
As displayed in the appendices between subsections I.a) and II.b), the basic statistics on the data set are
very helpful in providing insights to the potential outcomes of the paper. Extrapolating from the mean of
the normalized data values14, we can see that in periods one and two of the European data as well as the
second period of the Asian data, brewers generally outperform the market average. Even in the first peri-
od of the Asian data, the brewers perform better than the NYSE Composite Index, just not as well as the
exceptional Nikkei 225. This is very well represented in the graphs15. We can clearly see the separate
beer stocks of the European market as well as its corresponding aggregate outperforming the MSCI Eu-
rope and the NYSE Composite. They have stronger and sharper rises before, retreat fairly pro-cyclically
during, and then rebound strongly directly after the recession. Notable turnarounds occur in late 2007
and then again in early 2009. The Asian graph shows less of a trend and much denser data in the first
period. Going into the second period, we see declines and rebounds at approximately the same time as
the European firms and, just as was the case in Europe, the beer stocks emerge from the recession faster
and more smoothly that then market indices.
13Without normalization, one stock with a considerably larger magnitude of value than another would very simply
overshadow it in a data set of the aggregate values.
14 See Appendix, Sections I.b and I.d
15 See Appendix, Section II
8/2/2019 Economics 490 Beer and Recessions
12/36
2
8
b. The Model
As laid out in the methodology and with the subsequent data choices, this model will use normalized
stock prices and their aggregates as the dependent variables in each times series OLS regression. The
dependent variables for each regression will be a combination of the NYSE Composite, the pertinent re-
gional index for the particular dependent variable in use, the pertinent exchange rate, and whichever lag
variables are deemed appropriate in preliminary testing. Depending on the outcomes of that testing, there
will be between 3 and 6 independent variables in each regression. Taking Yt as the independent variable
with Xti (i=1,2,3) as the non-lagged dependent variables and Xt-1i (i=1,2,3) as the possible dependent lag
variables, we have an OLS regression that looks like such:16
Yt = 0Xt1 + 1Xt-11 + 2Xt1 + 3Xt-11 + 4Xt1 + 5Xt-11 + t
Although I will run regressions on each stock and each aggregate for each of the two periods, my atten-
tion in the results will be centered on the output of the aggregate based regressions. Those results of the
individual stocks will be of primary concern during the choice of lag variables to accept in the preliminary
regressions and then will be used mostly as supporting evidence in the discussion of the final regression
results.
c. Expectations
16 Note: t is the error value for each point along the regression line.)
8/2/2019 Economics 490 Beer and Recessions
13/36
1
Given the long-term findings in all of the reviewed literature, I expect to find behavior representative of a
normal, pro-cyclical good in all of the period one regressions. This corresponds with my intuitive, eco-
nomic expectations that beer, under normal economic conditions, is consumed as a normal, price sensi-
tive good. In the second period I expect something a little different. Similar to the way in which Freeman
describes beers investment potential, I expect to see a defensive nature in which the stock values react to
the plunging market indicators; neither counter-cyclical or a-cyclical, but rather a dampened pro-cyclical
effect would correspond not only with Freemans description but also with the sticky downward behavior
uncovered by Krger and Svensson (2008) and Cook and Moore (2002). Therefore, it is implicitly as-
sumed that the lag variables should be more significant (statistically and in magnitude) in the second peri-
od than found in the first. Though this does not readily show itself in the basic statistics or the graphs, I
think it should become readily apparent with the onset of analysis.
With respect to the exchange rates, I think that this model will show a persistently positive correlation be-
tween the exchange rate and the stock value. Intuitively, an appreciation of the domestic currency (Euro
or Yen) will lead to a depreciating stock value. This assumption is founded in the status of these brewers
as multinationals with extensive export businesses. If the producing currency appreciates, the goods be-
come more expensive to import in other parts of the world and demand falls. As this process has inher-
ently slower response time than say, share prices, I expect to see significant positive lag variables present
for the exchange rates in both regions.
8/2/2019 Economics 490 Beer and Recessions
14/36
2
8
In summary, I think that the stickiness of beer consumption to downward pressure will commute itself to
stock prices and slow the effects of the downturn on stock values. Once faced with a return of upward
pressure, the stocks will show a rapid return beyond that of the relevant market indices. This all translates
into an investment that, although likely not recession-proof as Ahrens (2004) claims, will be recession re-
sistant and perhaps a good choice of protection against unexpected market contractions.
d. The Preliminary Regressions
Before setting forth with the final regression functions, regressions isolating individual lag variables were
run for each dependent variable in each period. Their statistical significance was assessed based on the
confidence intervals in which the null hypothesis (that they are equal to zero) could be rejected. An em-
phasis was placed on the regressions of the aggregate dependent variables and a 95% confidence inter-
val was chosen as the minimum requirement to keep that particular lag term in the final regression equa-
tions.
As presumed by the literature and my methodology, the lag variables were all considerably less significant
in the period from July 2005 Aug 2007. The only lagged-variable in the first period to successfully reject
the null hypothesis (H0: =0) at a 95% confidence interval is Euro per USD. In the second period all three
lagged-variables in the Asian model were statistically significant, however, in the European regressions
only the lagged- Euro per USD was above the 95% confidence level.
8/2/2019 Economics 490 Beer and Recessions
15/36
1
Going into the final regressions this leaves us with the OLS equations:17
Asian Model- First Period
Yt = 0(Nikkei 225)t + 1(NYSE Comp.)t + 2(Yen/USD)t + t
Asian Model- Second Period
Yt = 0(Nikkei 225)t + 1(Nikkei 225)t-1 + 2(NYSE Comp.)t + 3(NYSE Comp.)t-1 + 4(Yen/USD)t +
5(Yen/USD)t-1 + t
European Model- First Period
Yt = 0(MSCI Europe)t + 1(NYSE Comp.)t + 2(Euro/USD)t + 3(Euro/USD)t-1 + t
European Model- Second Period
Yt = 0(MSCI Europe )t + 1(NYSE Comp.)t + 2(Euro/USD)t + 3(Euro/USD)t-1 + t
IV. The Results and Discussion18
The normalized stock price aggregates in each market bring to light interesting results when analyzed un-
der the scope of an OLS regression. Looking at the first period initially, we see that expectations are split
in their fit to the model. As previously stated and assumed, beers in both regions behave as normal, pro-
cyclical investment goods during the normal period of economic activity. The null hypothesis is rejected
at the 99% confidence interval for the NYSE Composite Index on both markets and in the Asian market
17 All regression equations can be found in the Appendix, section III
18 See Appendix, Section IV, parts a.4), a.8), b.4), and b.8) for detailed full-output regression data. For summarized
regression output data, refer to Appendix, Section V.
8/2/2019 Economics 490 Beer and Recessions
16/36
2
8
the Nikkei 225 is robust to a similar degree. In line with the basic data analysis, the coefficient values in-
form us that brewers outperform the market in Europe and slightly underachieve in Asia the NYSE Com-
posite Index has a coefficient of nearly 3 when compared to the European aggregate while neither it nor
the Nikkei 225 has a coefficient of more then 1 with respect to the Asian aggregate. It is interesting that
neither the MSCI Europe, nor any of the exchange rates, or even the lagged-exchange rates are statisti-
cally significant. This could perhaps be explained by excessive correlation between the dependent vari-
ables and should be addressed in any future work. Another possible explanation could be found in a
more detail look at the production structure of these firms. If it was the case that much of their exported
brew was actually subcontracted to brewers in the consuming country, as is usually the case in Canada,
then a change in exchange rates would have very little effect on the end price or thus demand of that
brewers beer.
Looking now at the second period or recession period results, we once again are presented with re-
sults that are a mix of expected and unexpected. The Asian breweries still display signs of pro-cyclical
behavior with positive coefficients on the Nikkei 225 and the lagged- NYSE Composite. Also positively
significant in the Asian model is the lagged-Yen/USD variable. Together these lags, neither of which was
present in the first period Asian regression, are likely an indicator that the Asian market itself had a slightly
sticky response to the US downturn. As the American markets crashed, the Japanese market briefly held
strong before following suit the transfer of economic turmoil was probably delayed for Asia, and the
Tokyo Stock Exchange specifically. The sign attached to the Yen/USD-lag variable is peculiar in its impli-
cations about the effect that an American financial crisis can have on an Asian brewer. Being positive,
8/2/2019 Economics 490 Beer and Recessions
17/36
1
significant, and greater than one, it means that as the Yen appreciates relative to the USD19 at the start of
the recession, there is a more than proportional drop in value of beer investment values. This would be
startling if it were not for the lagged nature of this variable. Instead of indicating a flight of value from the
beer stock as the Yen initially appreciates (relative to the USD), it illustrates a defensiveness of the stock
once the Yen begins to fall as well a period later. So, when the woes of the Asian currencies begin to
catch up with their American brethren, this positive coefficient signals a noteworthy defense of the stocks
value when the Yen finally does start dropping as well, the values of Sapporo, Kirin, and Asahi are resis-
tant.
Where the Asian breweries showed a delayed response to the United States financial meltdown, the Eu-
ropean ones showed both immediate and lagged significant responses. Also in contrast is the direction of
correlation; in Europe, appreciations in the Euro to the dollar (both today and yesterday) result in large in-
creases in the value of the beer stocks. The betas for Euro/USD and lagged-Euro/USD are -2.77 and
-2.61 respectively. I expect that this result stems from the transfer of investments from USD exchanges to
the Euro as the recession took hold. Investors, losing faith in the USD as a vessel for investment, likely
shifted many of their assets to the European markets for added strength and stability. Quite notably, and
quite significantly20, the recession-period results in Europe indicate a strong counter-cyclical relationship
with the domestic market, or in this case, the MSCI Europe. Countering this result is the persistent pro-
cyclical relationship between the aggregate stock values and the NYSE Composite value. In this second
19 In a recession started in the USA, it is fair to assume that the USD will fall relative to the Yen and other world cur-
rencies, thus causing them to appreciate
20 The p-value of MSCI Europe in period two testing is equal to zero, that is, the resulting coefficient is extremely ro-
bust.
8/2/2019 Economics 490 Beer and Recessions
18/36
2
8
period, the NYSE Composite coefficient, though still positive, is only about half of what it was in period
one. The highly correlated values of the two western indices together with the overpowering magnitude of
the counter-cyclical MSCI Europe coefficient in the second period, indicates that beer may actually be a
recession-proof investment option in the European market.
V. Conclusion
First and foremost, the results of this analysis robustly support the findings in the literature that, during
normal economic periods, beer is a normal and pro-cyclical good. When we escape from the analysis of
regular business cycles, we encounter statistically significant indicators in each market that point to a cer-
tain response system prevalent in that market. For Europe, beer based investments are highly defensive
and counter-cyclical in the face of a major global recession. With greater density in the data and a more
extensive analytical framework, we would likely come up with a more empirically defensible statement of
European beers level of recession-proof. However, in light of the limitations, it is fair to say that this
model is in support of beer as a recession-proof investment at least in the European case. For Asian
beer investments, a recession does not mean a significant departure from pro-cyclical behavior. Rather,
the stocks are essentially just as pro-cyclical with the market aggregate, only showing their slightly defen-
sive nature through the side avenue of currency devaluation.
In conclusion, I have found that the value of beer-based investments during a recession exhibits heteroge-
neously responsive behavior, dependant on the specific market it resides in. Always pro-cyclical during
8/2/2019 Economics 490 Beer and Recessions
19/36
1
unexceptional economic times, yet defensive or even counter-cyclical during recessions, beer looks to be
a good investment whether rain or shine.
Bibliography
8/2/2019 Economics 490 Beer and Recessions
20/36
2
8
1. Cook, Philip J. and Michael J Moore (2002), The Economics Of Alcohol Abuse And Alcohol-Con-
trol Policies, Health Affairs, 21 (2), 120-133
2. Krger, Niclas A. and Mikael Svensson (2008), Good Times Are Drinking Times: Empirical Evi-
dence on Business Cycles and Alcohol Sales in Sweden 1861-2000, rebro University, Working
Paper Series, Paper no.2
3. Bentzen, Jan and Valdemar Smith (2004), Are the fluctuations in alcohol pro- or counter-cyclical?
Empirical evidence from the Scandinavian countries using long-run time series data, VDQS
Qenometri XI Conference in Dijon.
4. Freeman, Donald G. (2009), Beer in Good Times and Bad: A U.S. State-Level Analysis of Eco-
nomic Conditions and Alcohol Consumption, Beeronomics Conference, May 2009.
8/2/2019 Economics 490 Beer and Recessions
21/36
1
Appendix
Table of Contents
I. Basic Statistics
a. European Nominal
b. European Normalized
c. Asian Nominal
d. Asian Normalized
II. Graphs
a. European Market Graph
b. Asian Market Graph
III. Regression Equations
8/2/2019 Economics 490 Beer and Recessions
22/36
2
8
a. Asian Model- First Period
b. Asian Model- Second Period
c. European Model- First Period
d. European Model- Second Period
IV. Regression Results
a. European Regression Results
i. AB-Inbev, July 2005 Aug 2007
ii. Heineken N.V., July 2005 Aug 2007
iii. SABMiller, July 2005 Aug 2007
iv. Aggregate, July 2005 Aug 2007
v. AB-Inbev, Sept 2007 Feb 2010
vi. Heineken N.V., Sept 2007 Feb 2010
vii. SABMiller, Sept 2007 Feb 2010
viii.Aggregate, Sept 2007 Feb 2010
8/2/2019 Economics 490 Beer and Recessions
23/36
1
b. Asian Regression Results
i. Sapporo, July 2005 Aug 2007
ii. Asahi, July 2005 Aug 2007
iii. Kirin, July 2005 Aug 2007
iv. Aggregate, July 2005 Aug 2007
v. Sapporo, Sept 2007 Feb 2010
vi. Asahi, Sept 2007 Feb 2010
vii. Kirin, Sept 2007 Feb 2010
viii. Aggregate, Sept 2007 Feb 2010
V. Summary Results
8/2/2019 Economics 490 Beer and Recessions
24/36
2
8
I. Basic Statistics
a. European Nominal
8/2/2019 Economics 490 Beer and Recessions
25/36
1
b. European Normalized
c. Asian Nominal
d. Asian Normalized
8/2/2019 Economics 490 Beer and Recessions
26/36
2
8
II. Graphs
a. European Market Graph
b.
Asian Market Graph
8/2/2019 Economics 490 Beer and Recessions
27/36
1
III. Regression Equations
a. Asian Model- First Period
i. Yt = 0(Nikkei 225)t + 1(NYSE Comp.)t + 2(Yen/USD)t + t
b. Asian Model- Second Period
i. Yt = 0(Nikkei 225)t + 1(Nikkei 225)t-1 + 2(NYSE Comp.)t +
3(NYSE Comp.)t-1 + 4(Yen/USD)t + 5(Yen/USD)t-1 + t
c. European Model- First Period
i. Yt = 0(MSCI Europe)t + 1(NYSE Comp.)t + 2(Euro/USD)t +
3(Euro/USD)t-1 + t
d. European Model- Second Period
i. Yt = 0(MSCI Europe )t + 1(NYSE Comp.)t + 2(Euro/USD)t +
3(Euro/USD)t-1 + t
8/2/2019 Economics 490 Beer and Recessions
28/36
2
8
IV. Regression Results
a. European Results:
i. AB-Inbev, July 2005 Aug 2007
8/2/2019 Economics 490 Beer and Recessions
29/36
1
ii. Heineken N.V., July 2005 Aug 2007
iii. SABMiller, July 2005 Aug 2007
8/2/2019 Economics 490 Beer and Recessions
30/36
2
8
iv. Aggregate, July 2005 Aug 2007
v. AB-Inbev, Sept 2007 Feb 2010
8/2/2019 Economics 490 Beer and Recessions
31/36
1
vi. Heineken N.V., Sept 2007 Feb 2010
8/2/2019 Economics 490 Beer and Recessions
32/36
2
8
vii. SABMiller, Sept 2007 Feb 2010
viii. Aggregate, Sept 2007 Feb 2010
b. Asian Regression Results
8/2/2019 Economics 490 Beer and Recessions
33/36
1
i. Sapporo, July 2005 Aug 2007
ii. Asahi, July 2005 Aug 2007
8/2/2019 Economics 490 Beer and Recessions
34/36
2
8
iii. Kirin, July 2005 Aug 2007
iv. Aggregate, July 2005 Aug 2007
8/2/2019 Economics 490 Beer and Recessions
35/36
1
v. Sapporo, Sept 2007 Feb 2010
vi. Asahi, Sept 2007 Feb 2010
8/2/2019 Economics 490 Beer and Recessions
36/36
vii. Kirin, Sept 2007 Feb 2010
viii. Aggregate, Sept 2007 Feb 2010
V. Summary Results