The Long-Run Effects of a Public Policy on Alcohol Tastes and Mortality

40 Pages Posted: 9 May 2016 Last revised: 2 Aug 2018

Lorenz Kueng

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Evgeny Yakovlev

NES

Date Written: July 25, 2018

Abstract

We document the long-run effects of a large public policy which changed young consumers' tastes for different types of alcohol. We estimate the age profile of taste formation using the temporary prohibition period from 1985-87 which dramatically changed the relative supply of different alcoholic beverages in Russia and shifted young consumers' long-run preferences from hard to light drinks. We find similar effects when studying the large import shocks in the late 1990s on young consumers' tastes while older consumers' tastes remained largely unchanged. The resulting large cohort differences in current alcohol consumption shares explain a significant part of the recent decrease in male mortality. Policy simulations suggest that mortality will continue to decrease by another 23% over the next twenty years due to persistent effects on consumer tastes. Program impact evaluations that focus only on contemporaneous effects can therefore severely underestimate the total effect of such public policies which change preferences for goods.

Keywords: long-run policy effects, tastes, mortality, program evaluation

JEL Classification: D12, H31, I18, J18

Suggested Citation

Kueng, Lorenz and Yakovlev, Evgeny, The Long-Run Effects of a Public Policy on Alcohol Tastes and Mortality (July 25, 2018). Available at SSRN: https://ssrn.com/abstract=2776422 or http://dx.doi.org/10.2139/ssrn.2776422

Lorenz Kueng (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States
+1 (847) 491-7843 (Phone)
+1 (847) 491-5719 (Fax)

HOME PAGE: http://www.lorenzkueng.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Evgeny Yakovlev

NES ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

HOME PAGE: http://https://sites.google.com/site/evgenyyakovlev/

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