Tao Sun

Research Interests

Applied Econometrics, Bayesian Inference, Industrial Organization, Health Economics

(Choice Modeling, Demand Estimation, Mixture Models, Bayesian Factor Analysis, Drug Use, Sin Tax)

My research specialization lies in applied econometrics and Bayesian inference, with a particular focus on discrete choice models and their applications in health economics and industrial organization. I am currently engaged in four research projects that advance econometric methods with a strong policy orientation.

Job Market Paper

Bundle Choice Model with Endogenous Regressors: An Application to Soda Tax

Abstract: This paper proposes a Bayesian factor-augmented bundle choice model to estimate joint consumption as well as the substitutability and complementarity of multiple goods in the presence of endogenous regressors. The model extends the two primary treatments of endogeneity in existing bundle choice models: (1) endogenous market-level prices and (2) time-invariant unobserved individual heterogeneity. A Bayesian sparse factor approach is employed to capture high-dimensional error correlations that induce taste correlation and endogeneity. Time-varying factor loadings allow for more general individual-level and time-varying heterogeneity and endogeneity, while the sparsity induced by the shrinkage prior on loadings balances flexibility with parsimony. Applied to a soda tax in the context of complementarities, the new approach captures broader effects of the tax that were previously overlooked. Results suggest that a soda tax could yield additional health benefits by marginally decreasing the consumption of salty snacks along with sugary drinks, extending the health benefits beyond the reduction in sugar consumption alone.