Sarah Moshary

I am an Assistant Professor at the Haas School of Business, UC Berkeley. My research interests include Quantiative Marketing, Industrial Organization, and Political Economy. My work studies pricing, TV and digital advertising, and regulation. Here is my CV.


Published & Forthcoming Papers:

Beyond Consumer Switching: Supply Responses to Food Packaging & Advertising Regulations (with Jorge Ale-Chilet)

2022, Marketing Science 41(2): 243-270.

Abstract: This paper studies the effect of nutrition warning labels and advertising restrictions on the breakfast cereal market in Chile. In June 2016, the Ministry of Health required food products that exceed thresholds for sugar (22.5g) and calories (350kcal) to carry conspicuous front-of-package warning labels. Further, these products were barred from advertising on TV programs with high child viewership. Early evidence suggests that the regulation induce consumers to switch to products without warning labels; we show that this change in demand elicits a supply response. In particular, we present evidence of bunching just below the cutoffs. Using a structural model of cereal demand, we find that reformulation tends to reinforce the intent of the reform, in particular, by lowering the calorie content of cereal purchases.

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

2021, Marketing Science 40 (4): 619-636, NBER Working Paper No. 25186

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.

How and When to Use the Political Cycle to Identify Advertising Effects (with Bradley Shapiro and Jihong Song)

2020, Marketing Science 40(2): 283-304, NBER Working Paper No. 27349

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.

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

2020, RAND Journal of Economics 51(3): 615-649.

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.

Working Papers:

Preferences for Firearms and Their Implications for Regulation (with Bradley Shapiro and Sara Drango)

Abstract: This paper estimates consumer demand for firearms with the aim of evaluating the likely impacts of firearm regulations. We first conduct a stated-choice-based conjoint analysis and estimate an individual-level demand model for firearms. We validate our estimates using aggregate moments from observational data. Next, we use our estimates to simulate changes in the number and types of guns in circulation under alternative regulations. Importantly, we find that bans or restrictions that specifically target “assault weapons” increase demand for handguns, which are associated with the vast majority of firearm-related violence. We provide distributions of consumer surplus under counterfactuals and discuss how those distributions could be useful for crafting policy.

Sponsored Search in Equilibrium: Evidence from Two Experiments

Abstract: Advertising affects not only the firm that advertises, but also the platform that hosts the advertisement. Using data from a field experiment at an e-commerce platform, I demonstrate that the effects on the advertising firm and the hosting platform can differ sharply. The experiment blocks all sponsored search advertising for a small fraction of site visitors. Compared to users who are shielded from ads, users who see ads spend significantly more on sponsored listings and significantly less on organic listings. The second effect dominates, revealing that on net, sponsored search reduces total sales on the platform. Using a separate natural experiment, I also find evidence that sponsored search puts upward pressure on prices, which can exacerbate cannibalization. Together, these findings illustrate the cost of advertising from the perspective of the platform.

School Food Policy Affects Everyone: Retail Responses to the National School Lunch Program (with Jessie Handbury)

Abstract: We study the private market response to the National School Lunch Program, documenting economically meaningful spillovers to non-recipients. We focus on the Community Eligibility Provision (CEP), an expansion of the lunch program under the 2010 Healthy, Hunger-Free Kids Act. Under the CEP, participating schools offer free lunch to all students. We leverage both the staggered roll-out and eligibility criterion of the CEP, which is limited to schools where at least 40% of students participate in other means-tested welfare programs. We find that local adoption of CEP leads to a 10% decline in grocery sales at large retail chains. Re- tailers respond with chain-level price adjustments: chains with the most exposure lower prices by 2.5% across all outlets in the years following adoption, so that the program’s welfare benefits propagate spatially. Using a stylized model of grocery demand, we estimate that by 2016 the indirect benefit had reduced grocery costs for the median household by approximately 4.5%.

Investigating the Pink Tax: Evidence against a Systematic Price Premium for Women in CPG (with Natasha Bhatia and Anna Tuchman)

Abstract: The pink tax refers to an alleged empirical regularity: that products targeted toward women are more expensive than similar products targeted toward men. This paper leverages a national dataset of grocery, convenience, and mass merchandiser sales, in combination with novel sources on product gender targeting, to provide systematic evi- dence on price disparities for personal care products targeted at different genders. The results are mixed: while women’s deodorant products are indeed more expensive, on the order of 6%, women’s disposable razors are about 8% less expensive. We then inves- tigate potential drivers of differential pricing with a focus on deodorants. Analysis of wholesale prices indicates that differences in costs cannot fully explain the differences in deodorant retail prices that we document. Rather, our findings suggest that demand for women’s deodorant products is relatively inelastic. We also find a higher share of category TV advertising features women’s products. Finally, we consider the potential welfare effects of price parity regulations.

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.

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

NBER Working Paper No. 27349

Abstract: We examine how market structure, measured as the number of firms, affects prices, quantities, product assortment, and consumer surplus. Our analysis exploits Washing- ton’s deregulation of spirit sales, which generated exogenous variation in market structure across the state. Consistent with the uniform pricing literature, we find no effect of increased competition on prices. Rather, we document an expansion of product assortment, which in turn increases purchasing. Using a discrete-choice demand model, we estimate that wider assortments increase consumer surplus by $3.20/month when moving from monopoly to duopoly. However, this increase is largest for heavy drinking households, raising concerns about social welfare.

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:

Legalizing Arbitrage: A Textbook Case (with Bradley Larsen and Jim Dana)

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.