{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/115528"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/115528","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Three essays on consumer behavior in commodity markets","abstract":"Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2024-05-01","abstract_html":"Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2024-05-01","abstract_has_math":false,"creators":["He, Shan"],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Economics","degree_department":null,"school":null,"contributors":["Fullerton, Don","Myers, Erica","Lemus, Jorge","Hong, Seung-Hyun"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2022,"date_issued":"2022-05","date_published":"2022-05","updated_at":"2026-07-22T22:24:54Z","subjects":["consumer shopping behavior","consumer mistakes","circular economy","one-stop-shopping convenience","firm scope","taxation."],"languages":["en","eng"],"rights":["Copyright 2022 Shan He"],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"https://hdl.handle.net/2142/115528","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Fullerton, Don","Myers, Erica","Lemus, Jorge","Hong, Seung-Hyun"]},{"key":"dc:creator","label":"Author","values":["He, Shan"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2022-05","2022-04-07"]},{"key":"dc:type","label":"Dc Type","values":["text","Thesis"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Economics"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["consumer shopping behavior","consumer mistakes","circular economy","one-stop-shopping convenience","firm scope","taxation."]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en","eng"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 2022 Shan He"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["https://hdl.handle.net/2142/115528"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2024-05-01","The student, Shan He, accepted the attached license on 2022-04-05 at 11:57.","The student, Shan He, submitted this Dissertation for approval on 2022-04-05 at 12:21.","This Dissertation was approved for publication on 2022-04-07 at 11:57.","DSpace SAF Submission Ingestion Package generated from Vireo submission #17588 on 2022-11-11 at 11:56:04","My dissertation investigates consumer shopping behavior, and it also evaluates how such consumer behavior would affect firm behavior or policy design. This dissertation consists of three chapters. The first and third chapters are my two independent empirical studies, and the second chapter is co-authored with Don Fullerton. In the first chapter, I estimate the extent to which consumers respond to energy costs when purchasing energy-using durables, when product-specific lifetime is provided and considered. Using market-level transaction data for lightbulbs, I compare consumer demand responses to the local annual energy cost versus the annual cost over the life of the appliance that has the same present value as the up-front purchase price – the “levelized annual cost of ownership” (LACO). I find consumers are significantly inattentive to energy costs when purchasing lightbulbs. This holds for “average” consumers and consumers across the income and education spectrum; and even holds under a wide range of assumptions on discount rates and durability, including two extreme cases in which consumers overestimate or underestimate the lightbulb lifetime. In addition, accounting for a specific lifetime provides significantly different estimates from those estimated using a fixed average lifetime. These findings have implications for information-based policies, and for subsidies for energy-efficient durables generally. In the second chapter, my co-author and I begin an economic analysis of consumer choices about product durability. The interdisciplinary circular economy literature recommends longer lasting products, in order to reduce pollution from extraction, production, and disposal. But standard economic analysis shows that optimal pollution taxes do not depend on product life. In this chapter, my co-author and I find conditions under which consumers choose lives that are too short – a “durability gap”. First, in our model, having a suboptimal preexisting output tax means that durability is suboptimal. We show that an increase in the output tax encourages purchase of more durable products and raises welfare. Second, in that case, welfare also is raised by a subsidy for durability or a marginally binding durability mandate. Third, the internalities or consumer errors we study have ambiguous effects. Fourth, we find that a social discount rate less than private discount rate is the strongest case for policy to favor durability. In the third chapter, I exploit a regulation that made it legal to sell liquor in retail stores to investigate the impact of adding product categories in a store on the sales of products in the same and competing stores. I find that stores, where buyers can purchase both liquor and non-alcohol products, are visited more frequently, consistent with the hypothesis of one-stop shopping convenience. Retail stores that introduced liquor benefit from business stealing from liquor sales and complementary non-alcohol categories. On average, sales of non-alcoholic products increase by 1.1 percent, tobacco sales increase by 3 percent, and total sales increase by 5 percent for stores that began selling liquor. Further, I find that the aggregate consumption for liquor increases, while for tobacco, it remains roughly constant, suggesting substitution of tobacco sales across stores."]},{"key":"dc:format","label":"Dc Format","values":["application/pdf"]},{"key":"dc:title","label":"Title","values":["Three essays on consumer behavior in commodity markets"]}]}],"canonical_facts":{"dc:contributor":["Fullerton, Don","Myers, Erica","Lemus, Jorge","Hong, Seung-Hyun"],"dc:creator":["He, Shan"],"dc:date":["2022-05","2022-04-07"],"dc:description":["Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2024-05-01","The student, Shan He, accepted the attached license on 2022-04-05 at 11:57.","The student, Shan He, submitted this Dissertation for approval on 2022-04-05 at 12:21.","This Dissertation was approved for publication on 2022-04-07 at 11:57.","DSpace SAF Submission Ingestion Package generated from Vireo submission #17588 on 2022-11-11 at 11:56:04","My dissertation investigates consumer shopping behavior, and it also evaluates how such consumer behavior would affect firm behavior or policy design. This dissertation consists of three chapters. The first and third chapters are my two independent empirical studies, and the second chapter is co-authored with Don Fullerton. In the first chapter, I estimate the extent to which consumers respond to energy costs when purchasing energy-using durables, when product-specific lifetime is provided and considered. Using market-level transaction data for lightbulbs, I compare consumer demand responses to the local annual energy cost versus the annual cost over the life of the appliance that has the same present value as the up-front purchase price – the “levelized annual cost of ownership” (LACO). I find consumers are significantly inattentive to energy costs when purchasing lightbulbs. This holds for “average” consumers and consumers across the income and education spectrum; and even holds under a wide range of assumptions on discount rates and durability, including two extreme cases in which consumers overestimate or underestimate the lightbulb lifetime. In addition, accounting for a specific lifetime provides significantly different estimates from those estimated using a fixed average lifetime. These findings have implications for information-based policies, and for subsidies for energy-efficient durables generally. In the second chapter, my co-author and I begin an economic analysis of consumer choices about product durability. The interdisciplinary circular economy literature recommends longer lasting products, in order to reduce pollution from extraction, production, and disposal. But standard economic analysis shows that optimal pollution taxes do not depend on product life. In this chapter, my co-author and I find conditions under which consumers choose lives that are too short – a “durability gap”. First, in our model, having a suboptimal preexisting output tax means that durability is suboptimal. We show that an increase in the output tax encourages purchase of more durable products and raises welfare. Second, in that case, welfare also is raised by a subsidy for durability or a marginally binding durability mandate. Third, the internalities or consumer errors we study have ambiguous effects. Fourth, we find that a social discount rate less than private discount rate is the strongest case for policy to favor durability. In the third chapter, I exploit a regulation that made it legal to sell liquor in retail stores to investigate the impact of adding product categories in a store on the sales of products in the same and competing stores. I find that stores, where buyers can purchase both liquor and non-alcohol products, are visited more frequently, consistent with the hypothesis of one-stop shopping convenience. Retail stores that introduced liquor benefit from business stealing from liquor sales and complementary non-alcohol categories. On average, sales of non-alcoholic products increase by 1.1 percent, tobacco sales increase by 3 percent, and total sales increase by 5 percent for stores that began selling liquor. Further, I find that the aggregate consumption for liquor increases, while for tobacco, it remains roughly constant, suggesting substitution of tobacco sales across stores."],"dc:format":["application/pdf"],"dc:identifier":["https://hdl.handle.net/2142/115528"],"dc:language":["en","eng"],"dc:rights":["Copyright 2022 Shan He"],"dc:subject":["consumer shopping behavior","consumer mistakes","circular economy","one-stop-shopping convenience","firm scope","taxation."],"dc:title":["Three essays on consumer behavior in commodity markets"],"dc:type":["text","Thesis"],"thesis:degree_discipline":["Economics"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois at Urbana-Champaign"]},"updated_at":"2026-07-22T22:24:54Z"}