RESEARCH

Working Papers

Shrinkflation: What Happens When Package Sizes Change? (Job Market Paper)

(With Pedro Pires) [Draft]

Package size is a central characteristic in consumer goods, and changes in size have implications for consumer demand, welfare, policy, and firm behavior. This paper first develops a method to identify size changes at scale. We apply it to retail scanner data and show that size reductions are considerably more common than increases. Next, we estimate the dynamic demand response to size changes using an event study approach. The demand response to size increases is immediate and stable over time. In contrast, after size decreases, demand has a sluggish response: the size elasticity is smaller in the short term than in the medium term. An incentivized shopping experiment shows that individuals deviate from optimal behavior by responding less to size than to price, and provides evidence of attention as a mechanism. With the experiment, we test policy interventions, showing that displaying unit prices and making sizes more prominent can reduce welfare losses. On the other hand, size change labels generate a bias in the opposite direction, causing individuals to over-respond to sizes and thus generating only moderate reductions in welfare losses.  We explain the empirical results with a dynamic demand model that allows for inattention, paired with a supply model in which firms strategically advertise size increases but not reductions, and derive sufficient statistics for the consumer-surplus effects of inattention and related policies. In the short term, the consumer surplus losses from inattention after a median size reduction are equivalent to the consumer share of deadweight loss from a tax that increases the price by 6%.

Fake News: What Is Its Impact? Can We Do Something About It?

[Draft]

The rise of fake news led to widespread public concerns based on claims that it affects behaviors. Nevertheless, the evidence of the impact of fake news on behaviors is scarce and inconclusive, and there is no consensus on how to deal with the potential negative effects. In this paper we conduct a survey experiment to evaluate the impact of a fake news article concerning environmental activism. Additionally, the effect of a fact-checking article correcting the fake news story is also evaluated. The measured outcomes include beliefs and pro-environmental preferences and behaviors. The treated participants were randomly assigned to either read an extract of the fake news article or of the correction article. The remaining participants constitute the control group. We find clear impacts on beliefs: the fake news article increases misperceptions while the correction reduces them. However, our results show small to null effects of both treatments on pro-environmental preferences and behaviors.

Selected Work in Progress

The Role of Price History on Consumer Choice

(With Alexander Whitefield)

What Determines Support for Labor Movements? An Analysis of a Randomized Digital Campaign

(With Junru Lyu)