Working Paper: NBER ID: w18863
Authors: John Cawley; Rosemary Avery; Matthew Eisenberg
Abstract: This paper is the first to estimate the impact of exposure to deceptive advertising on consumption of the advertised product and its substitutes. We study the market for over-the-counter (OTC) weight-loss products, a market in which deceptive advertising is rampant and products are generally ineffective with potentially serious side effects. We control for the targeting of ads using indicator variables for each unique magazine read and television show watched.\n\nOur estimates indicate that exposure to deceptive advertising is associated with a lower probability that women, and a higher probability that men, consume OTC weight loss products. We find evidence of spillovers; exposure to deceptive print ads is associated with a higher probability of dieting and exercising for both men and women. We also find evidence that better-educated individuals are more sophisticated consumers of advertising and use it to make more health-promoting decisions.
Keywords: deceptive advertising; weight loss products; consumer behavior; public health
JEL Codes: D83; I18; M37; M38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exposure to deceptive television ads (D18) | lower probability of women consuming OTC weight loss products (D18) |
| exposure to deceptive print ads (M38) | higher probability of men consuming OTC weight loss products (D18) |
| exposure to deceptive print ads (M38) | higher probability of dieting and exercising for both genders (I12) |
| exposure to television ads for OTC weight loss products (D18) | negatively correlated with dieting among women (I12) |