The Effect of Voluntary Restrictions on Television Advertising on the Demand for Carbonated Soft Drinks

In response to concern about the effects of advertising on carbonated soft drink (CSD) consumption, the two largest manufacturers began voluntary self-regulation of their advertisements to children under the age of 12. We estimate the demand for CSDs in the United States over 15 markets using a large, detailed household level data set. We test to see if the advertising restriction had any immediate impact on CSD purchases. Contrary to expectations, we find that purchases increase for several of the CSD brands. This can be explained to some extent by a reduction in prices, however there are likely marketing factors not observed in our analysis that impact purchases as well. While these advertising restrictions do not appear to reduce purchases, there may be other long term benefits associated with reducing children’s exposure to advertising to unhealthy food products