Rational Addiction, Health Information and Dynamic Demand for Foods: The Case of Energy Drinks (Link)
The decision of consuming unhealthy foods has long interested health and food policy researchers to study effective ways to improve dietary choice. This paper focuses on potential food addictive behaviors and the influence of health information by answering two questions: whether consumers exhibit addictive behavior for certain types of foods that usually contain a high level of sugar, fat, and caffeine; whether consumers continue the unhealthy food consumption due to lack of health information. Using energy drinks as a case, this paper estimates a dynamic discrete choice model of demand following the rational addiction framework. Results indicate the rational addictive behaviors are heterogeneous across consumers. While light users do not exhibit addictive behaviors, heavier users are significantly influenced by their past consumption, leading to increased consumption in the future. Meanwhile, health information plays an important role in awareness of the harmful consequences of unhealthy addictive goods. Therefore, the addiction raises dynamics in demand and generates important policy implications. Sugar tax would have a greater impact than the estimates from a static demand model because of the complementarity between current and future consumption. Moreover, information policies are more effective for people who consider their future seriously.
Publications and Papers Under Review
1. Chen, Xuan, Yizao Liu, Edward C. Jaenicke, and Adam N. Rabinowitz. "New concerns on caffeine consumption and the impact of potential regulations: The case of energy drinks." Food Policy 87 (2019): 101746. (Link)
2. Liu, Yizao, Xuan Chen, and Adam N. Rabinowitz. "The role of retail market power and state regulations in the heterogeneity of farm‐retail price transmission of private label and branded products." Agricultural Economics 50, no. 1 (2019): 91-99. (Link)
3. Liu, Yizao, Xuan Chen, Adam Rabinowitz, Benjamin Campbell, “Demand Challenges and Marketing Strategies in the Promotion of Local Foods: The Case of Fluid Milk”, Revise and Resubmit, Agricultural Economics. (Link)
Working Papers
1. Chen, Xuan. “Rational Addiction, Health Information and Dynamic Demand for Foods: The Case of Energy Drinks”
2. Chen, Xuan, Yizao Liu, Adam N. Rabinowitz. “Private Labels Competition, Retail Profitability and Bargaining Power in the Fluid Milk Market”. (Link)
3. Rabinowitz, Adam N., Yizao Liu, Xuan Chen, and Benjamin Campbell “Consumer Interest in Animal Welfare: The Impact on Willingness-to-Pay for Organic and Local Fluid Milk”(Link)
4. Rabinowitz, Adam N., Yizao Liu, Xuan Chen. “The Impact of State Price Regulations on Farm-Retail Price Transmission: The Case of Fluid Milk”
Working in Progress
1. Chen, Xuan, Yizao Liu, and Pei Zhou. “The Impact of Online Grocery Shopping on Food Choices”
2. Chen, Xuan, Yizao Liu, and Pei Zhou. “Product Innovation and the Demand for “Better for You” Drinks”
More information on my google scholar: google_scholar_Xuan