Long-Run Consequences of Temporary Policies: Tastes and Mortality
41 Pages Posted: 9 May 2016 Last revised: 8 Nov 2017
Date Written: November 6, 2017
Can a temporary policy permanently change consumer tastes, and does it matter? We study how a public policy successfully changes young individuals’ tastes, with important but unintended long-run consequences for mortality. We use temporary supply restrictions from 1985-87 and large import shocks to Russia in the late 1990s to estimate the age profile of taste formation. Twenty years later, young consumers' tastes have shifted from traditional to more "western" products and from hard to light alcoholic drinks. We show that these policy-induced taste changes matter. The shift in alcohol tastes explains about 60% of the recent decline in Russian male mortality decades after the intervention has ended. These estimates are based on national-level, regional-level and individual-level consumption and mortality data. Program evaluations which focus only on the short-run impact of a policy can therefore yield severely biased estimates of the total effect if the policy also changes tastes.
Keywords: long-run policy effects, tastes, program evaluation, mortality
JEL Classification: D12, H31, I18, J18
Suggested Citation: Suggested Citation