Working Papers

Abstract: Menthol cigarettes have been banned in parts of the U.S. based on the premise that they are more addictive than non-menthol cigarettes. In this paper, I propose a framework and a novel identification strategy to compare addictiveness across different categories based on consumer panel data. Using variation in the length of temporary breaks in consumption, I compare the effect of past consumption to that of static preferences in driving consumption levels for each cigarette type. I find that demand for menthol cigarettes depends less on past consumption and therefore menthol cigarettes are less addictive. Despite lower addictiveness, menthol cigarettes compare unfavorably to non-menthol cigarettes on other dimensions of addictive behavior: they are harder to quit successfully and more attractive to first-time users.

Abstract: We study how a strike at 240 Stop & Shop stores affected consumer demand for the grocery chain after the strike ended. Strikes can simultaneously bring awareness to employee-employer frictions and disrupt supply. Therefore, we consider two mechanisms through which strikes may impact post-strike demand: 1) a reputation effect, if this awareness impacts choice, and 2) a state-dependence effect, if consumers’ choices made during the supply disruption impact their future choices. We disentangle these effects using a novel identification strategy that leverages variation in visit frequency across Stop & Shop customers. We find no evidence of a reputation effect. However, state dependence in store choice led to a 9.25% decrease in trips to Stop & Shop that persisted for the four months we observe post–strike. We also document that the chain adjusted its promotions, which partially mitigated this negative effect. These results add to our understanding of both consumer store choice and the long-term impact of strikes, which may impose costs on firms even after their resolution.

Abstract: This paper examines how direct-to-consumer advertising (DTCA) shapes off-label demand for semaglutide. Although semaglutide was initially approved for type 2 diabetes under the brand name Ozempic, its DTCA promoted weight-loss benefits prior to FDA approval of semaglutide for weight management. Using granular prescription and medical claims data from a large sample of commercially-insured individuals, we estimate the effects of DTCA on demand across medical conditions, before and after clinical validation of the weight-management use case. We find that DTCA increases off-label initiation prior to clinical validation, both among individuals without relevant diagnoses and, more strongly, among high BMI individuals, for whom use was later approved. DTCA effects strengthen as clinical evidence accumulates, as does baseline treatment initiation, suggesting the lessening of access frictions. Differential DTCA responses across insurance plans indicate that patients with more generous coverage are better able to convert DTCA-driven interest into initiation, implying greater DTCA-induced exposure to both the potential benefits and risks of early off-label adoption. Overall, our results show that DTCA can accelerate the diffusion of off-label use before formal approval, while providers and insurers shape the distribution of advertising-induced off-label demand.

Abstract: We analyze the impact of a temporary shock to food supply on households’ dietary choices. We use hurricane-induced closures of grocery stores, which are typically short term. Results show that store closures influence household purchasing patterns even after the grocery store has reopened. We find a decrease in the nutritional value of household purchases for the five-month period after the store has reopened, despite no change in total expenditures. This finding supports the hypothesis that supply factors play a substantial role in shaping household diets. 

Publications

Abstract: We discuss how habit is defined across disciplines that study human choices. In particular, we examine the role of learning in forming habits, the roles of automaticity, context and cues, and attention, and whether habits reflect a change in preferences or a choice system which is partly decoupled from preferences. These constructs are used to create a framework for economics, psychology, and marketing research, suitable for analysis of consumer choice experiments and datasets.

Abstract: We analyze structural state dependence in brand choice using variation from brand switching during stock-outs caused by hurricanes. We derive a simple test for structural state dependence based on the time-series of choice persistence for households affected by the stock-outs. Using data from the bottled water category, we show that demand increases substantially before hurricanes and causes households to purchase different brands. We find that purchase behavior reverts back to its pre-hurricane trajectory immediately after a hurricane and we are not able to reject the null hypothesis of no structural state dependence. By contrast, the common approach of estimating structural state dependence based on temporal price variation via a discrete choice model yields a positive effect using data for the same category. We argue that our approach is better suited to identify the causal impact of past choices because it requires fewer assumption and is based on more plausibly exogenous variation in brand switching, i.e. due to stock-outs.