The Effects of Banning Advertising in Junk Food Markets
نویسندگان
چکیده
We develop a structural model to analyze the effects of banning advertising on market equilibria and welfare in junk food markets. We consider the impact on demand and prices, and show how to quantify welfare effects when advertising might lead consumers to take decisions that are inconsistent with their underlying preferences. We use transaction level data on the potato chips market and find that banning advertising leads to a direct reduction in demand, but also toughens price competition, leading to lower prices and increased demand. Welfare increases as consumers benefit from no longer making distorted decision and from lower prices.
منابع مشابه
An ex ante evaluation of the effects of banning advertising on junk food markets
We develop a structural model to analyze the effects of banning advertising on demand, supply and market equilibria in junk food markets. We use transaction level data on the potato chips market and find that banning advertising does not lead to a reduction in demand because, while banning advertising reduces consumers’ taste for junk food, it also toughens price competition, leading to lower p...
متن کاملThe Effects of Banning Junk Food Advertising
We develop a structural model to analyze the effect of banning advertising on market equilibria and welfare in junk food markets. We consider the impact on demand and prices, and we show how to quantify welfare effects when advertising might lead consumers to take decisions that are inconsistent with their underlying preferences. We use transaction level data on the potato chips market and find...
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