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The Effects of Banning Advertising in Junk Food Markets

Pierre Dubois (), Rachel Griffith () and Martin O’Connell
Authors registered in the RePEc Author Service: Martin O'Connell

Review of Economic Studies, 2018, vol. 85, issue 1, 396-436

Abstract: There are growing calls to restrict advertising of junk foods. Whether such a move will improve diet quality will depend on how advertising shifts consumer demands and how firms respond. We study an important and typical junk food market—the potato chips market. We exploit consumer level exposure to adverts to estimate demand, allowing advertising to potentially shift the weight consumers place on product healthiness, tilt demand curves, have dynamic effects and spillover effects across brands. We simulate the impact of a ban and show that the potential health benefits are partially offset by firms lowering prices and by consumer switching to other junk foods.

Keywords: Advertising; Demand estimation; Dynamic oligopoly; Welfare (search for similar items in EconPapers)
JEL-codes: L13 M37 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: The effects of banning advertising in junk food markets (2016) Downloads
Working Paper: The effects of banning advertising in junk food markets (2016) Downloads
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