This Ad is for You: Targeting and the Effect of Alcohol Advertising on Youth Drinking

Endogenous targeting of alcohol advertisements presents a challenge for empirically identifying a causal effect of advertising on drinking. Drinkers prefer a particular media; firms recognize this and target alcohol advertising at these media. This paper overcomes this challenge by utilizing novel data with detailed individual measures of media viewing and alcohol consumption and three separate empirical techniques, which represent significant improvements over previous methods. First, controls for the average audience characteristics of the media an individual views account for attributes of magazines and television programs alcohol firms may consider when deciding where to target advertising. A second specification directly controls for each television program and magazine a person views. The third method exploits variation in advertising exposure due to a 2003 change in an industry-wide rule that governs where firms may advertise. Although the unconditional correlation between advertising and drinking by youth (ages 18-24) is strong, models that include simple controls for targeting imply, at most, a modest advertising effect. Although the coefficients are estimated less precisely, estimates with models including more rigorous controls for targeting indicate no significant effect of advertising on youth drinking.