How does adult alcohol consumption affect intra-household expenditure distribution and children’s well-being? Evidence for Argentina from a collective demand model

Alcohol consumption by one member of the household generates negative ex-ternalities in the family budget, affecting the distribution of expenditure and the well-being of the other members. Significant reductions in the resources allocated to children associated with high alcohol consumption by adults can have negative consequences for their long-term development. This paper anal-yses whether alcohol consumption by adults is associated with the distribution of expenditure within households, affecting the well-being of children. We esti-mate a collective demand model for Argentina using data from the 2017/2018 National Household Expenditure Survey (ENGH). The estimates allow us to identify the proportion of total expenditure allocated to adults and children, fo-cusing on families with different levels of alcohol consumption. This work pres-ents the first evidence for Latin America on the relationship between alcohol consumption and the allocation of expenditure within the household. Results indicate that intense alcohol consumption is linked to a lower child well-being, as it is associated with a redistribution of resources within the home in favor of adults.