Long-Run Effects of Public Policies: Endogenous Alcohol Preferences and Life Expectancy in Russia

We use two quasi-natural experiments in the 1980s and 1990s to identify how public policies affect important long-run outcomes by changing preferences. Large but shortlived shocks to product availability in Russia shifted young consumers’ long-run preferences from hard to light alcohol. The resulting large cohort differences in current alcohol consumption shares decades after the interventions ended explain about 60% of the recent decrease in male mortality based on both micro-level and aggregate estimates. Mortality will continue to decrease by another 23% over the next twenty years based on our analysis. Program impact evaluations that focus only on contemporaneous effects can therefore severely underestimate the total effect of such public policies.