Rational Addiction Evidence From Carbonated Soft Drinks

Liu Xiaoou

No 51620, 2009 Conference, August 16-22, 2009, Beijing, China from International Association of Agricultural Economists

Abstract: This paper applies the Becker-Murphy (1988) theory of rational addiction to the case of carbonated soft drinks, using a time-varying parameter model and scanner data from 46 U.S. cities. Empirical results provide strong evidence that carbonated soft drinks are rationally addictive, thus opening the door to taxation and regulation. Taking rational addition into account, estimated demand elasticities are much lower than previous estimates using scanner data.

Keywords: Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety (search for similar items in EconPapers)
Pages: 31
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae09:51620

DOI: 10.22004/ag.econ.51620

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