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.
Authors
CPP Co-Director, IFS Research Director
Rachel is Research Director and Professor at the University of Manchester. She was made a Dame for services to economic policy and education in 2021.
Research Fellow Toulouse School of Economics
Pierre is a Research Fellow at the IFS, a Professor of Economics at the Toulouse School of Economics and a co-editor of the JEEA.
Research Fellow University of Wisconsin
Martin, previously Deputy Research Director, is a Research Fellow at IFS and Professor of Economics at the University of Wisconsin.
Journal article details
- DOI
- 10.1093/restud/rdx025
- Publisher
- Oxford University Press
- JEL
- L13, M37
- Issue
- Issue 1, March 2017, pages 1-41
Suggested citation
P, Dubois and R, Griffith and M, O'Connell. (2017). 'The effects of banning advertising in junk food markets' (1/2017), pp.1–41.
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