Effects of price and alcohol content on purchase behaviour: an analysis of Australian and New Zealand youth drinking

Purpose – The excessive consumption of alcohol by young people is a current and controversial issue in New Zealand (NZ) and Australia. The literature suggests that such consumption is an accepted social norm, and that young people deliberately drink to reach a level of intoxication. Current public policies to reduce consumption, beyond education through media campaigns, include taxation to raise the price and movements to limit the allowable alcohol content in some beverages popular with youth. This paper aims to determine whether price or alcohol content changes will have any effect on youth drinking. Design/methodology/approach – An experiment was conducted in both Australia and NZ to examine the effects of price changes and alcohol content changes on behavioural intention. A third implied hypothesis was also examined ‐ do Australian students differ from NZ students in their behaviour? Students were assigned to one of eight treatment groups, and their purchase intent was measured for ready‐to‐drink (RTD) products. Chi‐squared analysis was undertaken to test the hypotheses. Findings – Results suggest that social norms are stronger than price effects in both countries, and that alcohol content has a significant effect in NZ. These findings contradict government emphases on fiscal and regulatory approaches to modify purchase behaviour. Originality/value – This study is the first to specifically look at price and alcohol content manipulations and their potential effects on young consumers. As such it sheds light on a current marketing/social issue that has a potentially significant impact on young consumers worldwide.