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Alcohol and Consumption Smoothing

posted Oct 24, 2019, 12:16 AM by Ritwik Banerjee   [ updated Oct 24, 2019, 12:23 AM ]

Suppose the doctor told you that you were allowed 240ml of alcohol every week. How would you consume it? A large a day over four days, as consumption smoothing in classical economics would predict? Or 120ml a day over two days? Or just 240ml in a happy evening? Alcohol presents a particular challenge - the utility comes from crossing a certain bliss point. Consumption smoothing and alcohol don't always go together. And for a behavioural agent like me, who is enormously present biased, all or nothing seems like the way to go.

Bokai da, however, insists that it depends on the nature of the alcohol. Blended scotch, the only poison he says he can afford, needs to done away with at one go, while single malts may be spread over - his view. And then he launches his pet peeve on economists' reductionism of the complex world.