The Effects of Banning Advertising in Junk Food Markets

Dubois, Pierre; Griffith, Rachel; O’Connell, Martin

doi:10.1093/restud/rdx025

Cited by 96 publications

(83 citation statements)

References 56 publications

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“…Finally, by not including health benefits, our results are robust to substitution effects where consumers switch to other unhealthy products. For example, Dubois, Griffith, and O'Connell (2018) show that the health benefits from banning advertising on potato chips are likely to be mitigated by consumers switching to other junk foods. By not including health benefits in our consumer welfare metric, it is as if we have assumed that SSB health benefits are zero or have been completely offset by substitution.…”

Section: Background and Contextmentioning

confidence: 99%

An Analysis of Beverage Size Restrictions

Bourquard¹,

Wu²

2019

American J Agri Economics

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Due to high levels of obesity, various government interventions have been proposed to curb the consumption of sugar-sweetened beverages (SSBs). The New York City "soda ban," which proposed to limit the size of SSBs is among the most well-known and controversial. While public debates about beverage-size-restrictions tend to focus on how consumers are impacted, we use a nonlinear pricing model to show that, for all but extremely tight restrictions, consumer welfare would be unaffected by an enforceable restriction. However, sellers' profit would decline. While consumption is predicted to decline overall, the magnitude of the decline will vary by consumer segment.

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Section: Background and Contextmentioning

confidence: 99%

An Analysis of Beverage Size Restrictions

Bourquard¹,

Wu²

2019

American J Agri Economics

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“…To account for this, in Section 4, we estimate a structural model of demand and supply in order to shed light on the welfare effects of demand inducement in the presence of important real-world distortions: market power, strategic interactions, negotiated prices, insured demand, and behavioral hazard. 9 In this dimension, our approach adds to several recent studies on causal welfare effects of marketing in oligopoly settings: e.g., Dubois et al (2018) examine the effects of a ban on junk food advertising; and Shapiro (2018), Sinkinson and Starc (2018), and Alpert et al (2015) estimate causal effects of direct-to-consumer advertising (DTCA) on drug utilization.…”

Section: Introductionmentioning

confidence: 99%

“…Several recent papers (e.g Dubois et al (2018)Shapiro (2018);Sinkinson and Starc (2018)) focused on television advertising have explicitly focused on the possibility that such ads can have spillover effects across brands in a category.…”

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confidence: 99%

Physician-Industry Interactions: Persuasion and Welfare

Grennan¹,

Myers²,

Swanson³

et al. 2018

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In markets where consumers seek expert advice regarding purchases, firms seek to influence experts, raising concerns about biased advice. Assessing firm-expert interactions requires identifying their causal impact on demand, amidst frictions like market power. We study pharmaceutical firms' payments to physicians, leveraging instrumental variables based on regional spillovers from hospitals' conflict-of-interest policies and market shocks due to patent expiration. We find that the average payment increases prescribing of the focal drug by 73 percent. Our structural model estimates indicate that payments decrease total surplus, unless payments are sufficiently correlated with information (vs. persuasion) or clinical gains not captured in demand. AbstractIn markets where consumers seek expert advice regarding purchases, firms seek to influence experts, raising concerns about biased advice. Assessing firm-expert interactions requires identifying their causal impact on demand, amidst frictions like market power. We study pharmaceutical firms' payments to physicians, leveraging instrumental variables based on regional spillovers from hospitals' conflict-of-interest policies and market shocks due to patent expiration. We find that the average payment increases prescribing of the focal drug by 73 percent. Our structural model estimates indicate that payments decrease total surplus, unless payments are sufficiently correlated with information (vs. persuasion) or clinical gains not captured in demand.

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“…Many empirical papers in the literature study the channels through which advertising influences consumer demand, that is, whether advertising gives information about a product or affects utility from the product. 7 More recently, researchers have studied the effects of advertising in an equilibrium framework for different contexts: Goeree (2008) for the personal computer market; Dubois et al (2014) for junk food markets; and Gordon and Hartmann (2013) and Moshary (2015) for the U.S. elections. A paper that is closely related to ours is Hastings et al (2013), who also study advertising in a privatized government program (the privatized social security market in Mexico).…”

Section: Introductionmentioning

confidence: 99%

Advertising and Risk Selection in Health Insurance Markets

Aizawa

Kim

2015

FEDS

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We study impacts of advertising as a channel of risk selection in Medicare Advantage. We show evidence that both mass and direct mail advertising are targeted to achieve risk selection. We develop and estimate an equilibrium model of Medicare Advantage with advertising to understand its equilibrium impacts. We find that advertising attracts the healthy more than the unhealthy. Moreover, shutting down advertising increases premiums by up to 40% for insurers that advertised by worsening their risk pools, which further reduces the demand of the unhealthy. We argue that risk selection may make consumers better off by improving insurers' risk pools.

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The Effects of Banning Advertising in Junk Food Markets

Cited by 96 publications

References 56 publications

An Analysis of Beverage Size Restrictions

An Analysis of Beverage Size Restrictions

Physician-Industry Interactions: Persuasion and Welfare

Advertising and Risk Selection in Health Insurance Markets

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