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Abstract
Economic studies on consumers’ behavior can help us better understand the economic logic and mechanisms behind their consumption choice and quantity purchased. With the knowledge of consumption patterns, we can make more precise predictions of how consumers react to marketing strategies (e.g., advertising) or government interventions (e.g. soda tax). These prediction results are not only valuable to entrepreneurs but also to policymakers. From the scope of businesses, these studies allow them to leverage limited marketing resources to maximize profit; from the perspective of policymakers, such studies help them in designing more efficient policies no matter to encourage or curb the consumption of specific commodities. This study aims to explain the consumers’ behavior using suitable economic tools no matter where they come from and what they consume. In the first chapter, this study explores how income volatility affects the energy choice of the poor, using a discrete choice model; In Chapter Two, I simulate how U.S. consumers react to the package restriction of sugar-sweetened beverages by estimating a static demand system; The last chapter examines the relationship between past purchases and current demand for sugar-sweetened beverages by estimating a dynamic demand system, taking habit formation into consideration.