Economics Research Seminar – Professor Rachel Griffith
Title: The Effects of Sin Taxes and Advertising Restrictions in a Dynamic Equilibrium
Date: 13 November 2024
Time: 13:30 – 14:30
Venue: https://newcastleuniversity.zoom.us/j/86025984604
Meeting ID: 860 2598 4604 Passcode: 617344
If you would like to attend, please register using the following link:
The Effects of Sin Taxes and Advertising Restrictions in a Dynamic Equilibrium
Speaker: Professor Rachel Griffith
Professor Rachel Griffith is Professor of Economics at the University of Manchester and Research Director of the Institute for Fiscal Studies (IFS). She is an Editor of the Journal of Political Economy and an Associate Editor of Econometrica. She is Program Chair of the 2025 World Econometric Society Congress to be held in Seoul Korea. She is a Fellow of the British Academy, a Fellow of the Econometric Society, an Honarary Foreign Member of the American Economic Association. Rachel won the Birgit Grodal award in 2014, was awarded a CBE in 2015 for services to economic policy and was made a Dame Commander of the British Empire for services to economic policy and education in 2021. She was President of the European Economic Association from 2013-2015, the first woman to hold the position. She was President of the Royal Economic Society, serving from 2018-2021, the Society’s first female President in over 35 years and only the second woman to hold the post in its 129-year history. Rachel was Managing Editor of the Economic Journal from 2011-2017. She was previously a Professor in Economics at University College London. She sat on the Council of the Economic and Social Research Council (ESRC) from 2018-2023. She was Chair of the Economics and Economic History Section of the British Academy and was Deputy Chair of the Economics sub-Panel of the Research Excellence Framework. She was seconded to the Competition Commission as Senior Economist in 2001-2002. Rachel’s research has been published widely in the top international journals, and broadly considers issues related to the impacts of government policy on consumers, firms and the functioning of markets. Her specific interests relate to empirical work at the intersection of public economics and industrial organisation and in particular the retail food sector and nutrition. She has held two ERC Advanced Grant to study the behaviour of consumers and firms and the impact of government policy in food markets She has also published widely on innovation, productivity and corporate tax, and she is one of the Principle Investigators on the ESRC Centre for the Microeconomic Analysis of Public Policy at the Institute for Fiscal Studies.
Abstract:
We develop a dynamic equilibrium model of firm competition to study the impact of counterfactual policies, such as taxes and advertising restrictions, on pricing, advertising, consumption and welfare. We estimate the model using micro level data on the market for colas. We use consumer level exposure to television commercials to estimate the impact of advertising on product choice, model firms’ dynamic competition through their choice of advertising budgets and product prices, and exploit firms’ practice of delegating decisions over advertising slots to agencies to link the rich consumer level advertising variation with firms’ strategic choice variables. We show that a sugarsweetened beverage tax leads to a reduction in advertising and that the incremental effects of implementing advertising restrictions are substantially reduced with a tax in place.