The insignificant effects of price on drinking among male college students and the relatively small effects for female college students likely result, at least in part, from errors in the measure of price used (Chaloupka and Wechsler 1996). Researchers generally use average local retail prices as a measure of the monetary price of alcohol, thereby neglecting alcohol consumption that occurs at parties or other occasions at which the drinker does not pay retail price for the alcohol. Such errors are a general problem in econometric studies of alcohol demand using individual-level data but likely are more significant when studying college students, for whom average local retail prices may not be a good proxy for the prices paid by the student. For example, much of the drinking among college students, particularly binge drinking, takes place at parties where alcohol is available at no charge or at local bars that offer sharply discounted prices to attract college students.
