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The effects of banning advertising in junk food markets

Pierre Dubois, Rachel Griffith and Martin O'Connell

No 16-647, TSE Working Papers from Toulouse School of Economics (TSE)

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: 2016-05, Revised 2016-12
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The Effects of Banning Advertising in Junk Food Markets (2018) Downloads
Working Paper: The effects of banning advertising in junk food markets (2016) Downloads
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