The objective of this paper is to examine the factors which affect alcohol abuse and truancy among adolescents. We propose a theoretical formulation in which alcohol abuse and truancy appear as derived demands depending on personal, family and peer group variables, and we introduce unobserved individual effects that can influence both behaviours. Empirically, our paper develops an analysis where, after controlling for the existence of unobserved individual factors affecting both decisions, we test for peer influences. Our results first show evidence that alcohol abuse and truancy share unobserved factors affecting both decisions, and then confirm the existence of significant peer group influences on these two deviant behaviours.

Key words: peer, unobserved factors, risk behaviours, alcohol, truancy, bivariate probit.
JEL Classification: I10, I12, I20, I21.