VoxEU.org: Recent Articles

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Identifying state dependence in brand choice Posted: Consumers tend to be loyal to products they have purchased in the past, which companies may exploit to raise prices. To better understand whether this brand loyalty is driven by preferences or state dependence, this column looks at how households react when stockouts due to hurricanes force them to purchase different brands of bottled water. The authors do not find evidence of state dependence in bottled water brand. Although there is a large and significant decrease in loyalty during the stockout weeks, there is no effect in the post-hurricane period.

Reflections on the EU’s Carbon Border Adjustment Mechanism Posted: In July 2021, the EU announced a Carbon Border Adjustment Mechanism aimed at avoiding carbon leakage from the EU and promoting emissions reductions worldwide. This column summarises and reflects on a recent conference on the topic held by the EU-Japan Centre for Industrial Cooperation. It discusses the mechanism's proposed implementation schedule, consistency with WTO rules, and implications for EU–Japan trade relations. It highlights the important role Japan should play in the decarbonisation effort, especially by harnessing its strengths in technology and innovation.

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