Studies of consumers' use of alcohol beverage outlets have provided a basis for understanding drinking behaviors in different drinking environments. These studies have shown that drinking environments are related to both demographic and drinking pattern measures. Absent from these studies has been a theoretical basis on which to make predictions regarding drinking patterns and choices of drinking environments under the various social, economic, and environmental constraints typically confronting alcohol consumers. This study presents one such theoretical approach.The approach assumes that, in the context of individual preferences for alcohol, drinking choices are constrained by consumers' economic and time‐energy budgets for consumption. All other things being equal, it is suggested that greater budgets for consumption will be related to greater alcohol use, quality of beverages purchased, amenity values of purchase locations, or all three. Because on‐premise drinking entails greater economic costs, greater drinking levels will be related to lower utilization of on‐premise establishments.The predictions of this approach were tested using data obtained from telephone surveys of consumers conducted in 1990 and 1991. The results showed that controlling for income, variables related to greater time‐energy budgets for consumption (i.e., marital status and household composition) were related to greater consumption levels and greater utilization of on‐premise establishments. Controlling for demographic measures, greater income was related to greater utilization of restaurants and increased beverage quality. Controlling for all other measures, frequencies of consumption were inversely related to consumption at on‐premise establishments, reflecting the expected moderation in costs for heavier consumers on a limited alc