The rise of beeronomics(1)

Beer is the perfect accompaniment to pizza, a refreshing punctuation mark at the end of a day. But a growing number of academics see it as something more — a substance that can tell us important things about the world.

In many ways, brewing and human society grew hand in hand. Beer was the choice of generations long past — in China, people were drinking beer as long ago as 7000 BC — and today is the most-consumed alcoholic beverage globally.

Historically speaking, beer and the business of brewing have shaped everything from trade to national tastes. In Germany, for instance, the Reinheitsgebot (“purity law”) — a regulation on the books for nearly 500 years — dictated beer could be made of barley, hops, water, and nothing more. (The law is so old it predated the use of yeast.) It was repealed in 1987 when the European Court of Justice determined it interfered with trade in Europe. But over time, says Belgian economist Johan F. M. Swinnen, “German consumer preference adjusted to it to such an extent” that it still defines the tastes of one of the great beer-drinking nations.

Swinnen and other scholars have come together to create a new field, “beeronomics,” devoted to analyzing the economics of beer and brewing. In 2009, the first beeronomics conference was held in Belgium, with a second one last year in Germany. (A third is in the works for the United States.) Swinnen is also the editor of a new book on the subject, “The Economics of Beer,” published this winter by Oxford University Press.

Do people drink more during difficult economic times? What effect does social milieu have on personal preference? Can television change the course of an entire industry? Through the lens of beer, the book’s scholars attempt to answer such questions.

Ideas spoke by phone with Swinnen, professor of economics and director of the LICOS Centre for Institutions and Economic Performance at the University of Leuven in Belgium, about the meaning of microbrews, the impact of advertising, and which country’s beer is best.

IDEAS: How did you become interested in beeronomics?

SWINNEN: There’s an association of wine economists, and every year they have a conference. When I first heard, I said, “You’ve got to be kidding. You can have a conference on wine economics?” They said, “This is big business and it’s really important.” I come from Belgium. Belgium is beer. So I said, “If you guys can do something on wine, I can do beer.”

IDEAS: The book talks about beer-drinking nations vs. wine-drinking nations. It seems obvious which countries would be which. But is that changing?

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