Quality matters: alcohol edition - The Dismal Science
Eric Crampton • Aug 23, 2017 •
I’ve noted John Gibson’s work showing that standard demand estimation techniques overestimate the price elasticity of demand for sugary drinks, and consequently overestimate the effects of soda taxes. Gibson shows that, because most empirical work uses household expenditure on the product category divided by some measure of average price, that work bunches together consumer shifts along both quality and quantity … Read More
