This paper studies how local competition affects pricing and product assortment decisions. We leverage a unique circumstance in the context of the legalized cannabis industry in Washington State, where retail licenses were allocated via a lottery, which generates quasi-random variation in the number and proximity of competitors. This natural experiment helps address the endogeneity issues commonly encountered in causal analyses of competitive effects. The analyses yield three key findings: first, additional nearby competitors reduce markups, with nearly all of the effect concentrated in the first two competitors. Second, retailers facing more nearby competition differentiate their assortments. Third, this differentiation helps mitigate the intensity of price competition among retailers. In a partial equilibrium simulation, we evaluate a 10% increase in the number of licensed retailers and estimate that it would reduce markups and generate approximately $7.5 million in annual consumer savings. These findings shed light on the nature of localized competition and the implications of entry restrictions in regulated retail markets.

The authors examine how consumers modify their food purchases after adopting appetite-suppressing GLP-1 receptor agonists, such as Ozempic and Wegovy. Using survey responses on medication adoption linked to transaction data from a representative U.S. household panel, the authors document the prevalence, motivations, and demographic patterns of GLP-1 adoption. Households with at least one GLP-1 user reduce grocery spending by 5.3% within six months of adoption, with higher-income households reducing spending by 8.2%. While most food categories see spending declines, the largest reductions are concentrated in calorie-dense, processed categories, including a 10.1% decline in savory snacks. In contrast, a small set of categories show directionally positive changes, with yogurt experiencing the largest increase. Results show an 8.0% decline in spending at fast-food chains, coffee shops, and limited-service restaurants. These food demand adjustments persist through the first year of medication use, though with some attenuation after six months. Households discontinuing GLP-1s revert toward their preadoption grocery spending and shift toward slightly less healthy grocery baskets compared with their original baseline. These findings highlight the potential for GLP-1 medications to significantly change consumer food demand, a trend with increasingly important implications for the food industry as GLP-1 adoption continues to grow.

This paper analyzes the impact of lawsuit advertisements targeting drug companies. Although the main purpose of the ads is to recruit potential lawsuit plaintiffs, they also reach a broad audience of viewers. Medical professionals have raised concerns that drug injury ads may lead uninjured patients to misperceive the risks and benefits of treatment, leading them to discontinue medically necessary drugs. The paper examines how drug injury ads affect prescription fills and subsequent health outcomes. The empirical context analyzes anticoagulants, which are commonly used by elderly patients to prevent strokes. The study finds that drug injury ads lead to a decrease in filled prescriptions for targeted drugs and a corresponding increase in hospitalizations for conditions treated with anticoagulants. These results point to meaningful public health consequences and highlight the benefits from policy responses that promote accurate and balanced information.

We study the effect of price caps on the provision of costly effort by pharmaceutical firms using variation in drug discounts generated by a price regulation program that allows eligible hospitals to purchase outpatient drugs at steep discounts. These discounts directly affect drug manufacturers’ markups and may change firms’ incentives to exert promotional effort targeted toward physicians at these hospitals. We find that the effects of price regulation on pharmaceutical firm effort depend crucially on the design of the regulations and the multiproduct nature of pharmaceutical firms. Using detailed data on marketing payments from pharmaceutical firms to physicians, we observe that physicians receive 13% fewer promotional payments after their hospitals take up the program. The design of the price caps implies that discounts tend to increase with a drug’s age. Consistent with theoretical predictions, we find that pharmaceutical firms shift promotional payments away from older drugs and toward newer drugs, which are less affected by the price caps. For some drugs, this shift results in an increase in payments to physicians despite the price caps. Understanding these strategic, nonprice adjustments is important for policymakers seeking to design effective regulations targeting specific products.

Advertising is an input for many final goods, and broadcast television comprises a significant portion of ad spending in the United States. Yet, advertisers face different costs when purchasing national television ads. We seek to empirically confirm differences in firms' costs to advertise nationally. Network-advertiser contracts are secret, so we combine data on ad placements and average prices of program airings to analyze price dispersion. We document that "legacy" advertisers with established broadcast relationships receive favorable prices for equivalent ad inventories. This may benefit incumbents and potentially soften price competition from newcomers in product markets.

Producers frequently provide retailers with financial incentives to secure product distribution. These payments often take the form of vendor allowances: lump-sum transfers to retailers that do not directly depend on quantity sold. I introduce an estimation strategy that uses observed product selections to inform unobserved allowances. I use retailers’ replacement threats, which may allow them to capture both vendor transfers and lower wholesale prices. A counterfactual restricts firms to contract on only wholesale prices. Results show that vendor allowances may have not only (negative) product distortion effects but also (potentially positive) pricing effects.

Retailers control what products are offered on shelves, which may allow them to capture preferential contracts from their suppliers. I analyze the determinants of retail profitability through the lens of replacement threats, in which a buyer may obtain favorable pricing by threatening to source an input from a competitor. A theoretical analysis shows that retailers are less likely to benefit from replacement threats if they are better positioned to use other negotiation levers. An empirical analysis of the U.S. yogurt market confirms that larger buyers and regional retailers, with many stores in the market, benefit relatively less from replacement threats.

Despite the benefits of smoke-free legislation on adult health, little is known about its impact on children's health. We examined the effects of tobacco control policies on the rate of emergency department (ED) visits for childhood asthma (N=128,807), ear infections (N=288,697), and respiratory infections (N=410,686) using outpatient ED visit data in Massachusetts (2001-2010), New Hampshire (2001-2009), and Vermont (2002-2010). We used negative binomial regression models to analyze the effect of state and local smoke-free legislation on ED visits for each health condition, controlling for cigarette taxes and health care reform legislation. We found no changes in the overall rate of ED visits for asthma, ear infections, and upper respiratory infections after the implementation of state or local smoke-free legislation or cigarette tax increases. However, an interaction with children's age revealed that among 10-17-year-olds state smoke-free legislation was associated with a 12% reduction in ED visits for asthma (adjusted incidence rate ratios (aIRR) 0.88; 95% CI 0.83, 0.95), an 8% reduction for ear infections (0.92; 0.88, 0.97), and a 9% reduction for upper respiratory infections (0.91; 0.87, 0.95). We found an overall 8% reduction in ED visits for lower respiratory infections after the implementation of state smoke-free legislation (0.92; 0.87, 0.96). The implementation of health care reform in Massachusetts was also associated with a 6-9% reduction in all children's ED visits for ear and upper respiratory infections. Our results suggest that state smoke-free legislation and health care reform may be effective interventions to improve children's health by reducing ED visits for asthma, ear infections, and respiratory infections.

Shopping patterns in retail markets are highly persistent, with households patronizing the same stores over time. Whether this persistence reflects unobserved heterogeneity or a causal effect of past choices through state dependence remains an open question. We study an 11-day strike that effectively closed 240 Stop & Shop grocery stores, leveraging differences between households’ whose planned visits were, and were not, displaced by the strike to isolate the strike’s effects on consumer demand through state dependence. We find that displacing trips during the strike caused households to make 9.8% fewer trips to S&S after the strike’s resolution. The reduction is observed immediately in the period after the strike’s resolution and attenuates only gradually over time. The effect of trip displacement is larger for households who, during the strike, visit a store that they had not previously visited, consistent with search and learning frictions playing a role in state dependence. These results support an economically meaningful role of state dependence in grocery store choice, suggesting that temporary supply disruptions, and marketing tactics that induce consumer switching, can have long-term effects on profitability.

Analyses of public health warnings can miss broader behavioral responses if they focus only on the population or product named in the guidance. These broader responses are particularly important when consumers make treatment choices without a physician, when the evidence behind the guidance is contested, and when people may substitute toward medicines the warning did not evaluate. We study the September 2025 White House announcement linking prenatal acetaminophen use to autism and attention-deficit/hyperactivity disorder risk, a claim that major medical organizations challenged, saying it went beyond the available causal evidence. Using weekly purchases from a nationally representative panel of 132,575 U.S. households, we document changes in acetaminophen and substitute analgesic spending following the announcement. Acetaminophen spending fell by 11.4% in the first five weeks and remained 6.4% lower over the following two months. The response extended beyond the warning's clinical scope: even older households with no children, the group in our data least directly connected to pregnancy, reduced acetaminophen spending by 12.3%. Spending on ibuprofen and naproxen rose by 5.0%, partially offsetting the acetaminophen decline and shifting analgesic spending toward products with different risk profiles that the warning did not evaluate. The decline was also larger in more Republican-leaning counties, consistent with the response varying with support for the source of the warning. Together, these findings are consistent with a warning about a specific prenatal use being interpreted as a broader signal about the safety of the product itself.

This research note documents the construction of a Healthiness Index for grocery baskets using text embeddings. Standard scanner and panel data rarely include direct measures of the healthiness of purchased items, limiting research on consumer diet quality. This methodology provides an easily scalable and flexible approach to estimate the relative healthiness of grocery purchases at the item, category, and basket levels, facilitating comparisons over time as well as across households and retailers. While the approach does not offer precise nutrient-level assessments, it enables consistent, interpretable tracking of relative shifts in the healthiness of grocery purchases. We apply the index to document systematic variation in grocery healthiness across income groups, education levels, retailers, and geographic regions, as well as across six years of nationally representative US consumer data from Numerator, offering a framework for analyzing differences and tracking changes in dietary quality over time.