Endogenous Preferences and Long-Term Effects of Public Policies: Alcohol Consumption and Life Expectancy in Russia
We use two quasi-natural experiments in the 1980s and 1990s to identify how policies affect important long-term outcomes by changing preferences. Large but short-lived shocks to product availability in Russia shifted young consumers' long-run preferences from hard to light alcohol. The resulting large current cohort differences in alcohol consumption patterns explain a significant part of the recent increase in Russian life expectancy. Moreover, mortality of working-age males will continue to decrease by another 23% over the next twenty years. Program impact evaluations that focus only on contemporaneous effects can therefore severely underestimate the total effect of such public policies.
Kueng, Lorenz. 2016. Endogenous Preferences and Long-Term Effects of Public Policies: Alcohol Consumption and Life Expectancy in Russia.