collision detection: Study: Social drinking raises your income by up to 17%

September 27, 2006

Study: Social drinking raises your income by up to 17%

Economists have long noticed that people who drink tend to make more money than those who don't. Now a new study offers a theory to explain this: People who drink are more socially gregarious than nondrinkers, which increases the size of their Rolodexes and, by extension, their earning potential.

Or to put it another way: Drinking is the original social-networking technology.

In their paper -- "No Booze? You May Lose: Why Drinkers Earn More Money Than Nondrinkers" -- Bethany Peters and Edward Stringham used General Social Survey data to classify respondents into non-drinking, drinking, and "social drinking" categories. When the economists examined the respondents' earnings, they found that drinkers made about 10 to 14 per cent more than abstainers. Even more suggestively, "social" drinkers -- the ones out in bars -- made an additional 7 per cent on top of the normal drinking premium. As Stringham told the AFP, "social drinkers are out networking, building relationships, and adding contacts to their BlackBerries that result in bigger paychecks."

In contrast, abstainers have smaller social networks. This, the authors suggest, may be because ...

... abstainers may prefer to interact with other abstainers or less social people. Alternately, abstainers might not be invited to social gatherings, work-related or otherwise, because drinkers consider abstainers dull.

Heh. If the prose were any drier this study would spontaneously combust. Given that this work was done for the libertarian Reason Foundation, it's probably not surprising that the authors regard antidrinking advocacy as total buzzkill. And I have to admit, as a devoted fan of both high-end single-malt scotch and egregiously cheap beer, I kind of enjoyed all the cheap shots leveled at teetotallers. I also chuckled at how Peters and Stringham described the way they developed their hypothesis: A combination of "casual observation and scholarly accounts", which sounds like code for "getting smashed at Trader Vic's."

And check out the wacky graphics they included in the paper! I've excerpted some above. It's all this clip-art of people drinking themselves legless. If I weren't convinced the study is legit I'd suspect those pictures were the covert signal that this is a media prank.

(Thanks to Plastic for this one!)

Posted by Clive Thompson at September 27, 2006 02:41 PM

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Comments

This study is ludicrous. It briefly tries to explain away why this isn't due to reverse causation in an incoherent and wholly unconvincing paragraph on page 2. The fact is that the bulk of this effect is undoubtedly not causative in the way the author would have us believe. There are a dozen non-causative correlations between drinking and earning that I can think of off the top of my head: people with money can afford to pay for drinks at bars, socially extroverted people tend to drink and to make more money, many socially and economically marginalized groups (e.g. muslim immigrants) don't drink alcohol, etc. Even if we accepted the authors' findings at face value, it would only lead us to the conclusion that there is a strong corporate culture of alcohol consumption in America, and those who conform to it are more financially successful.

Research that come out of lobbying organizations is usually useless.

Posted by: Matt Norwood at September 27, 2006 4:40 PM

Yeah, their connections are pretty thin, I must say. If I weren't so generally tickled by the conclusion, I'd probably admit it was a little irresponsible to blog it. I = weak.

Posted by: Clive at September 27, 2006 4:43 PM

Matt: "many socially and economically marginalized groups don't drink alcohol"

Um, yeah, but then on the other hand many socially and economically marginalized groups hardly do anything but.

Perhaps the skew in the stats for this study is that it defines social drinking as something done in bars… I've seen a LOT of social drinking that happens in the street, in cars, in low cost housing, etc. I mean, hey, for every wall street martini sipper there's gotta be a six pack of guys brownbagging it in an alley somewhere. I used to drink with 'em back in my Kerouac inspired 20's and they were riotously social. But they didn't have much income, and they didn't drink in bars much.

Posted by: johntunger at September 27, 2006 6:19 PM

Sounds a lot like some "The Sims 2" programmers got loose and did some fun-time research... I haven't had a chance to play it yet, but I'm pretty sure that the point of drinking and partying in the "University" add-on is bulking up your stable of friends so that your sim becomes more successful through association with his or her contacts.

Posted by: Rollen at September 27, 2006 10:42 PM

But... if drinking raising your income by 17%, but you spend 20% of your income going out drinking...

Posted by: Bret at September 28, 2006 12:24 AM

... you'd at least have a lot of fun!

John, great points!

Rollen, that's a hilarious comparison point. I've never played the University pack either ... now I want to check it out.

Posted by: Clive at September 28, 2006 2:44 PM

Just a further link - Robert Putman's "Bowling Alone" also talks about the links and social capital amassed in university as a determinant of future success (page 306 of the first edition hardcover). Now, that's not quite a call for social drinking - but that's the state of socializing for most freshmen regardless of legality.

Posted by: Rollen at October 10, 2006 10:50 AM