By J.P. Nelson, Michael R. Baye
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Additional info for Advertising and Differentiated Products (Advances in Applied Microeconomics, Vol. 10)
As to the spillover issue, our results afﬁrm Green, Carman, and McManus’s statement (1991, p. 70) that “. . ” Speciﬁcally, milk advertising (which is strictly generic) was found to have a statistically signiﬁcant effect on the demand for juices and for coffee and tea. Whether these cross-effects are economically signiﬁcant depends crucially on supply response in the separate industries (Piggott, Piggott & Wright, 1995; Kinnucan, Xiao & Hsia, 1996), and thus is an open issue. Still, the existence of spillover effects seems no longer in doubt, which raises questions about the role of government in supporting programs that may beneﬁt one industry at the expense of another.
Soft drink advertising, over the same period, increased from $250 million per year to $462 million. No attempt was made in this study to determine whether the large increases in expenditures affect the response coefﬁcients. 5. Technically, deﬂating advertising expenditure is redundant in the Rotterdam model unless advertising homogeneity is rejected (see Selvanathan, 1989). 6. Negative own-advertising elasticities, although counterintuitive, are surprisingly prevalent in the literature. S. Non-alcoholic Beverage Demand 21 commodities in their system-wide estimates, and for two commodities in their singleequation (double log) estimates.
1987). Functional Form and Utility: A Review of Consumer Demand Theory. Westview Press, Boulder, CO. Green, R. , Carman, H. , & McManus, K. (1991). Some Empirical Methods of Estimating Advertising Effects in Demand Systems: An Application to Dried Fruits. Western Journal of Agricultural Economics, 16, 63–71. Kaiser, H. M. (1997). Impact of National Generic Advertising on Dairy Markets, 1984–1995. Journal of Agricultural and Applied Economics, 29, 303–313. Kaiser, H. , & Liu, D. J. (1997). S. Dairy Promotion.