A Dynamic Space-Time Panel Data Model of State-Level Beer Consumption
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A dynamic space-time panel data model containing random effects is used to examine state-level beer consumption over the period of 1970 to 2007 for the 48 contiguous US states and the District of Columbia. A valuable aspect of dynamic space-time panel data models is that the parameter estimates from these models can be used to quantify dynamic responses over time and space as well as space-time diffusion impacts. We examine the impact of state-level taxes on beer on home (own) state and outside (other) state consumption of beer. The model allows for this situation since buyers of beer near state borders can purchase in neighboring states if there is a tax advantage for doing so.