The gateway hypothesis proposes that cannabis use increases the risk of starting to consume hard drugs. We test this controversial, but influential, hypothesis on a sample of cannabis users employing a unique set of drug prices. A flexible approach is developed to identify the causal gateway...

Given the unprecedented reach of social media, firms are increasingly relying on social media as a channel for marketing communication. The objective of this study is to examine the effect of firm generated content (FGC) in social media on three key customer metrics, spending, cross-buying and...

We propose a demand model where consumers simultaneously choose a few different goodsfrom a large menu of available goods, and choose how much to consume of each good. Themodel nests multinomial discrete choice and continuous demand systems as special cases.Goods can be substitutes or...

Sponsored search is the mechanism whereby where advertisers pay a fee to Internet search engines to be displayed alongside organic (non-sponsored) web search results. Based on prior literature, we draw an analogy between these markets and financial markets. We use the analogy as well as the key...

We extend a semi-structural model of household income and consumption to allow for dynamic consumption elasticities with respect to transitory income shocks. Likelihood-based inference for our model accurately estimates consumption insurance against income shocks in simulated data from a...

This paper provides a new and complementary explanation for a pricing puzzle for seasonal products, namely, counter-cyclical pricing, drawing on the category-expansion effects of price promotions. Our study emphasizes the seasonal fluctuation in promotion frequency rather than the change in...

We examine empirically the path of consumption growth over time by looking at detailed microdata for the Spanish economy. We estimate different versions of a Euler equation linking consumption growth to the real interest rate and other socioeconomic and demographic variables. We work with two...

This paper proposes a simple method for estimating the lock-in effects of switching costs from firm-level data. We compare the behavior of already contracted consumers to the behavior of new consumers as the latter can serve as contrafactual to the former. In panel regressions on firms' incoming...

We analyze structural state dependence in brand choice using variation from brand switching during stock-outs caused by hurricanes. We derive a simple test for structural state dependence based on the time-series of choice persistence for households affected by the stock-outs. Using data from...

The paper examines the evolution of consumption patterns in Organization for Economic Co-operation and Development (OECD) countries from 1985 to 1999. Estimation of demand function parameters uncovered consistent evidence that differences in consumption patterns have recently diminished between...