Impact of US sugar-sweetened beverage taxes on prices and purchases: evidence from a multi-city synthetic control analysis
(with Justin White, Sanjay Basu, Kristine Madsen, Dean Schillinger, and Sofia B. Villas Boas). Submitted. Winner of Emerging Scholar Best Conference Paper at the 2023 Northeastern Agricultural and Resource Economics Association (NAREA) Annual Meeting.
Sugar-sweetened beverage (SSB) excise taxes are promoted as a key policy to reduce cardiometabolic diseases and other conditions, but comprehensive analyses of US SSB taxes have been difficult due to the absence of suitable methodologies to account for confounding factors. We use new quasi-experimental methods to estimate the overall effect of SSB taxes implemented in five large cities in the US: Boulder, Philadelphia, Oakland, Seattle, and San Francisco. We evaluated changes in SSB prices and volume purchased in these cities in the two years following tax implementation, compared to control groups constructed from other cities. We find prices of SSB products increased by an average of 33.1% (95% CI: 14.0%,52.2%; p<0.001) over the 2 years following tax implementation, corresponding to an average price increase of 1.3 cents per ounce and a price pass-through rate of 92% from distributors to consumers. SSB purchases in total volume declined by an average of 33.0% (95% CI: -2.2%,-63.8%; p=0.035) following tax implementation, corresponding to a price elasticity of demand of -1.00. Both effects were immediate and sustained, and we found no evidence of increased cross-border purchases following tax implementation. Scaling SSB taxes nationally could yield significant public health benefits.
Preferences and demand for information that entertains
This paper uses revealed preference methods to estimate demand for non-instrumental information in entertainment. We apply and extend the theory presented in Ely, Frankel, and Kamenica (2015, JPE) to conduct an empirical analysis that examines the effect of suspense and surprise on consumer demand. We first introduce alternative definitions of suspense and surprise using the theory of mutual information, and prove that suspense is in fact expected surprise. We then estimate the impact of suspense and surprise on television viewership using play-by-play and high-temporal frequency television ratings data from the National Basketball Association (NBA). Our primary results suggest that a one standard deviation increase in suspense increases viewership by 2.53% - 2.91%, while surprise has no impact. We also estimate within-game impacts of (i) absolute score differential and (ii) absolute score differential with respect to the point spread on viewership. These findings have important implications for entertainment media companies, including leagues and television broadcasters, and advertisers.