Essays on Public and Private Sector Consumer Markets

Bhatia, Natasha Bhagwan

doi:https://doi.org/10.21985/n2-nbmn-wa30

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Essays on Public and Private Sector Consumer Markets

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Policymakers and public entities work to make decisions that benefit society. Their choices, though, do not go into effect in a vacuum. Instead, the benefit they provide relies on the underlying consumer behavior that drives responses to those choices. This dissertation studies three different settings in which either policy is enacted or a public entity makes a decision and seeks to understand the nuance of consumers' responses to those actions. The first of these settings is transportation in New York City. The long debate on the optimal regulation of car services has been reinvigorated with the introduction of ride-hail regulation in major cities. Critics of the regulation have argued that regulation restricting car services like ride-hail and taxis are leaving passengers stranded. Instead, they argue that policymakers should focus their efforts in expanding transit to reduce car service usage. It is unclear whether this alternative policy proposal will work, because there is little evidence in the literature about the substitution patterns between any car service and transit. This paper uses the opening of the Second Avenue Subway in New York City in 2017 as a natural experiment to characterize substitution patterns from both taxis and ride-hail to transit. I use broad data that covers 74% of all car service trips in NYC. The data includes shared and private ride-hail from two competing platforms, Uber and Via. I find that the SAS caused trip volume to decrease by 13.3% total along the origin-destination pairs ("OD pairs") easily served by the subway. Decreases were more dramatic for shared trips, with UberPool trips decreasing by 49% and shared Via trips by 38%. I argue that the decreases in trip volume were driven by demand, rather than supply, platform actions, or search frictions. Finally, I provide suggestive evidence that these decreases resulted in a modest improvement in congestion in the affected OD pairs. The second of these settings is in the market for consumer packaged goods. The pink tax refers to an alleged empirical regularity: that products targeted toward women are more expensive than similar products targeted toward men. This paper leverages a national dataset of grocery, convenience, and mass merchandiser sales in combination with novel sources on product gender targeting to provide systematic evidence on price disparities for personal care products targeted to different genders. We find that deodorant products targeted toward women are indeed more expensive, on the order of 20%. We then investigate potential drivers of differential pricing. Analysis of wholesale prices indicates that differences in costs cannot fully explain the differences in retail prices we document. Rather, our findings suggest that demand for women's products is relatively inelastic. We also find a higher share of category TV advertising features women's products. Finally, we consider the potential welfare effects of price parity regulations. The last of these settings is that of a public library. Public libraries are one of the most visible ways that cities large and small serve their residents. Libraries use email marketing to encourage residents to use as many of the free resources available to them as possible. However, they often do so without strong guidance on best practices or a testing infrastracture to learn them. This paper provides information on one generalizable best practice in email marketing by looking at the effect of the order of content email engagement. I find that order effects in email marketing mirror those in past literature on order effects in other online settings. Products at the top of an email are 4.5x more likely to be clicked than products placed at the bottom of an email. I show that search costs are driving the impact of order by exploiting the fact that patrons who open on mobile have higher search costs than patrons who open on desktop. Next, I show that order effects are moderated by the subject line. If a product is included in the subject line, the impact of the top position is double for products not in the subject line than product in the subject line. Finally, I argue that clicks on the focal product are predictive of conversions, so order effects have implications for the outcome libraries actually care about: resource usage.

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