CitationKueng, Lorenz & Yakovlev, Evgeny (2016). Endogenous Preferences and Long-Term Effects of Public Policies: Alcohol Consumption and Life Expectancy in Russia [Working Paper]. Northwestern University.
AbstractWe 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.