Sarah Moshary

I am an Assistant Professor at the University of Chicago Booth School of Business. My research interests span topics from Industrial Organization to Political Economy, including work on the pricing of political advertising on TV, the privatization of liquor sales in Washington state, and price obfuscation in e-commerce. Here is my CV.

Contact Information:

5807 South Woodlawn Avenue
University of Chicago
Chicago, IL 60637


Research Papers:

Abstract: A central challenge in estimating the causal effect of TV advertising on demand is finding quasi-random variation in advertising. Political advertising in the US has been proposed as a plausible instrumental variable because political spending on television has skyrocketed in recent elections, topping $4 billion in 2016. We characterize the conditions under which political cycles theoretically identify valid TV advertising effects on demand and highlight the potential areas of concern for the exclusion restriction and monotonicity condition. To characterize ``where'' the approach might be most useful, we test the strength of the first stage of the political ad instrument using both a simple specification of the first stage and also optimal instruments obtained by machine learning. For the vast majority of commercial advertising categories, our findings suggest that researchers should consider using weak-instrument robust inference, as first stage F-statistics are less than 10 for at least 202 of 274 product categories. Political advertising has the largest first stage F statistic for categories that typically advertise exclusively locally, such as automobile dealerships and restaurants. Finally, we conduct a case study of the auto industry. Despite a very strong first stage, the IV estimate for this category is imprecise and includes zero.

Deregulation through Direct Democracy: Lessons from Liquor Markets (with Gaston Illanes)

Abstract: This paper examines the merits of state control versus private provision of spirits retail, using the 2012 deregulation of liquor sales in Washington state as an event study. This is the first shift from a public to a private system for spirits sales in the United States since Prohibition. We document effects along a number of dimensions: prices, product variety, convenience, substitution to other goods, state revenue, and consumption externalities. We estimate a demand system to evaluate the net effect of privatization on consumer welfare. Our findings suggest that deregulation harmed the median Washingtonian, even though residents voted in favor of deregulation by a 16% margin. Further, we find that vote shares for the deregulation initiative do not reflect welfare gains at the ZIP code level. We discuss implications of our findings for the efficacy of direct democracy as a policy tool. 

Price Discrimination in Political Advertising: Evidence from the 2012 US Presidential Elections

Abstract: In 2010, the US Supreme Court loosened contribution limits to Political Action Committees (PACs), sparking fears that big donors could exert outsize influence on elections by funding PAC advertising. However, PACs are potentially handicapped when buying airtime; Congress requires TV stations sell to official campaigns at lowest unit rates (LURs), but does not protect PACs. Data from 2012 reveals that PACs pay 40% above campaign rates, and that Republicans pay more than Democrats. I estimate a model of demand for advertising by PACs, exploiting misalignments of state borders and media markets to address price endogeneity. I find that prices reflect willingness-to-pay for viewer demographics, suggesting that extending LURs to PACs would favor candidates who prefer groups eschewed by commercial advertisers.


Market Structure and Product Variety: Evidence from a Natural Experiment in Liquor Licensure (with Gaston Illanes)

Abstract: This paper examines how market structure, measured as the number of firms, affects prices, quantities, and product assortment. Our analysis focuses on Washington’s deregulation of spirit sales, which generated exogenous variation in the number of retailers across the state. We find that an additional firm increases purchasing because retailers respond by offering greater product variety. However, these effects exhibit strong diminishing returns. We find further that prices do not adjust to competition. Overall, our results suggest that entry restrictions curtail liquor consumption. However, Washington’s licensure requirement appears a blunt policy instrument, as our estimates imply negligible effects in most markets.

Price Salience and Product Choice (with Tom Blake, Kane Sweeney and Steven Tadelis)

Abstract: We study the effect of price salience on whether a product is purchased and, conditional on purchase, the quality purchased. Consistent with our theoretical predictions, we find that making the full purchase price salient to consumers reduces both the quality and quantity of goods purchased. The effect of salience on quality accounts for at least 28% of the overall revenue decline. Evidence shows that the effects persist beyond the first purchase and impact even experienced users. Detailed click-stream data shows that price-obfuscation makes price comparisons difficult and results in consumers spending more than they would otherwise. We also find that sellers respond to increased price obfuscation by listing higher quality tickets.

Advertising Market Distortions from a Most Favored Nation Clause for Political Campaigns 

Abstract: This paper investigates the effect of a most favored nation regulation that protects political campaign purchases of advertising time. Regulation induces stations to sell less airtime to commercial advertisers to buoy campaign prices. I develop a model of station price discrimination, and estimate demand parameters using Bayesian MCMC methods. Results indicate this effect is substantial – on the order of 10% of total advertising airtime – relative to a counterfactual without regulation. Campaign rates are approximately 40% lower, while lowest commercial rates double.


Work in Progress:

 The Effects of Legitimizing Parallel Importation: A Textbook Case (with Bradley Larsen)

Abstract: This study examines the welfare effects of a Supreme Court decision in 2013 that legalized parallel importation—the practice of buying discounted goods abroad and reselling them in the US market—in the textbook industry. By facilitating arbitrage across international borders, the court decision reduced publishers’ ability to price discriminate. Using a large new dataset on textbook transactions, we measure the impact of the legal change on prices, sales, and seller composition, and provides structural estimates of the costs and benefits of international price discrimination in this industry.