When do Indians drink more beer?

People drink more both when they are happy and when they are unhappy. However, my research shows that Indians drink more when they are happy than when they are unhappy.

In my attempt to find the different indicators for Indian stock market, I found that beer consumption is a coincident indicator. Whenever Sensex goes up the beer production itself goes up. Whenever sensex is down beer production is down. In the book on Investments by Bodie, Kane, and Marcus, the authors mentioned that in the US, automobile industry's production are almost exactly aligned with that of the stock market. In India, apart from the sutomobile industry, it is the beer industry that also seems to be moving with the market.

The correlation between automobile industry production and sensex is 0.25. It is however 0.37 for the beer industry. However, because it is a coincident indicator, it does not lead to any profit making trading strategy.

So the bottomline is people drink more when they are happy than when they are unhappy.






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