Set refers to the state of mind of the user at the time of use.
Setting refers to the environment in which the user consumes the alcohol. For example, a person's set includes his mood and expectations. The opinions of the family, friends, and coworkers of the drinker also influence the experience. The setting also influences the way alcohol affects an individual. For example, a dark, smoky bar room full of motorcyclists provides a different atmosphere for drinking than a wedding reception with happy guests.