Price Elasticity and Alcohol Choice in Nairobi’s Informal Settlements

Authors

  • Moenga Author
  • Okumu Author

Keywords:

Alcohol pricing, Illicit alcohol, Consumption choice, Substitution effect, Informal settlements

Abstract

Alcohol pricing is a central determinant of drinking choices in Nairobi’s informal settlements, where illicit brews dominate consumption. This study surveyed 118 alcohol outlets and applied a multinomial logit model with controls for cost of living, outlet availability, and peer influence. Descriptive results show that respondents consumed on average 2.4 litters per visit; illicit alcohol accounted for 61% of total consumption. Empirical estimates reveal that a KES 10 increase in legal alcohol prices raised the probability of illicit alcohol choice by 8.7% (p < .01), while a KES 10 rise in illicit prices reduced consumption likelihood by 6.2% (p < .05). Peer influence and outlet density further amplified illicit substitution. These findings suggest that excise-driven price hikes, without strong enforcement and affordable alternatives, risk intensifying harmful illicit alcohol use.

Author Biographies

  • Moenga

    Academics with strong interest in socio-economic research

  • Okumu

    Strong interest in social research and data

References

Clair, V., Musau, A., Mutiso, V., Tele, A., Atkinson, K., Rossa-Roccor, V., ... & Frank, E. (2022). Blended-eLearning improves alcohol use care in Kenya: Pragmatic randomized control trial results and parallel qualitative study implications. International Journal of Mental Health and Addiction, 20(6), 3410-3437.

Conroy, R. (2015). Sample size: A rough guide. Retreived from http://www. beaumontethics. ie/docs/application/samplesizecalculation. pdf.

Ellard-Gray, A., Jeffrey, N. K., Choubak, M., & Crann, S. E. (2015). Finding the hidden participantS Solutions for recruiting hidden, hard-to-reach, and vulnerable populations. International Journal of Qualitative Methods, 14(5), 1609406915621420.

Holmes, J., Angus, C., Boyd, J., Buykx, P., Brennan, A., Gardiner, K., ... & Yannoulis, Y. (2022). Evaluating the impact of Minimum Unit Pricing in Scotland on people who are drinking at harmful levels.

Horáková, M., Bejtkovský, J., Barešová, P., & Urbánek, T. (2020). Alcohol consumption among the member states of the European Union in relationship to taxation. Adiktologie.

KNBS (2019). Kenya Population and Housing Census Volume 1 A: Population Distribution by Administrative Units. Nairobi. Government Printers. Accessible: https://www.knbs.or.ke/2009-kenya-population-and-housing-census-volume-1a- population-distribution-by-administrative-units/

Kenya National Bureau of Statistics. (2009). 2009 Kenya population and housing census volume 1A: Population distribution by administrative units. KNBS. Available at https://www.knbs.or.ke/2009-kenya-population-and-housing-census-volume-1a-populationdistribution-by-administrative-units/

Kozul, T. T. (2020). Graft and Slime in New York City: Exploring the Impact of Organized Crime on the Nullification of the Eighteenth Amendment.

Manthey, J., Gobiņa, I., Isajeva, L., Neneman, J., Reile, R., Štelemėkas, M., & Rehm, J. (2024). The impact of raising alcohol taxes on government tax revenue: insights from five European countries. Applied health economics and health policy, 22(3), 363-374.

Matthee, R. (2023). Angels tapping at the wine-shop's door: a history of alcohol in the Islamic world. Oxford University Press.

Mugenda, O. M & Mugenda, A. G. (2003), Research Methods: Quantitative and Qualitative Approaches, Nairobi: Acts Press.

National Authority for the Campaign Against Alcohol and Drug Abuse. (2022). National survey on the status of drugs and substance use in Kenya, 2022. NACADA. Available at https://nacada.go.ke/sites/default/files/2023/05/National%20Survey%20on%20the%20Status%20of%20Drugs%20and%20Substance%20Use%20in%20Kenya%202022.pdf

Nayab, A., Fatima, S., Rustam, S. A., Gul, A., Khan, A. U., Bibi, A., ... & Qayum, J. (2022). Alcohol consumptions and prevention of underage alcohol consumption in Pakistan.

Nelson, J. P., & McNall, A. D. (2016). Alcohol prices, taxes, and alcohol-related harms: A critical review of natural experiments in alcohol policy for nine countries. Health Policy, 120(3), 264- 272.

Neufeld, M., Bobrova, A., Davletov, K., Štelemėkas, M., Stoppel, R., Ferreira‐Borges, C., ... & Rehm, J. (2021). Alcohol control policies in Former Soviet Union countries: A narrative review of three decades of policy changes and their apparent effects. Drug and alcohol review, 40(3), 350-367.

Neufeld, M., Rovira, P., Ferreira-Borges, C., Kilian, C., Sassi, F., Veryga, A., & Rehm, J. (2022). Impact of introducing a minimum alcohol tax share in retail prices on alcohol-attributable mortality in the WHO European region: a modelling study. The Lancet Regional Health– Europe, 15.

Otzen, T., & Manterola, C. (2017). Sampling techniques on a population study. Int. J. Morphol, 35(1), 227-232.

Paraje, G. R., Jha, P., Savedoff, W., & Fuchs, A. (2023). Taxation of tobacco, alcohol, and sugar- sweetened beverages: reviewing the evidence and dispelling the myths. BMJ Global Health, 8(Suppl 8).

Rutterford, C., Copas, A., & Eldridge, S. (2015). Methods for sample size determination in cluster randomized trials. International journal of epidemiology, 44(3), 1051-1067. https://doi.org/10.1093/ije/dyv113

Sinkamba, R. P. (2015). Alcohol abuse and interventions strategies in Botswana and China: A preliminary study.

Tigerstedt, C., Makela, P., Karlsson, T., Härkönen, J., Lintonen, T., & Warpenius, K. (2020). Change and continuity in Finnish drinking in the 21st century. Nordic Studies on Alcohol and Drugs, 37(6), 609-618.

Wu, C., Thompson, M. E., Wu, C., & Thompson, M. E. (2020). Stratified sampling and cluster sampling. Sampling theory and practice, 33-56.

Downloads

Published

2025-09-22

Data Availability Statement

Upon Request

 

Issue

Vol. 1 No. 1 (2025): Macroeconomic Pathways and Policy Shifts in Eastern Africa: Launching a Regional Dialogue

Section

Articles

License

Copyright (c) 2025 Moenga, Okumu (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

All articles published in this journal are licensed under the Creative Commons Attribution 4.0 International License (CC BY 4.0).

Under this license:

  • Authors retain copyright of their work.

  • Users are free to:

    • Share — copy and redistribute the material in any medium or format

    • Adapt — remix, transform, and build upon the material for any purpose, even commercially

  • Conditions:

    • Appropriate attribution must be given to the original author(s) and source.

    • A link to the license must be provided.

    • Any changes made must be indicated clearly.

This license ensures the widest possible dissemination and use of published research, while giving authors credit for their work.

Why CC BY 4.0?

The CC BY 4.0 license supports:

  • Open Access principles, allowing anyone to read, share, and reuse articles without restriction.

  • Compliance with funder mandates (e.g., Plan S, Horizon Europe).

  • Academic citation and attribution integrity.

For full legal details of this license, please visit:
https://creativecommons.org/licenses/by/4.0/

How to Cite

Price Elasticity and Alcohol Choice in Nairobi’s Informal Settlements. (2025). Journal of Macroeconomics in East and Horn of Africa, 1(1), 30-44. https://eastafricajournal.org/index.php/jeamd/article/view/4

Most read articles by the same author(s)

Similar Articles

You may also start an advanced similarity search for this article.