Advertising effects in complete demand systems
- 1 October 1992
- journal article
- research article
- Published by Taylor & Francis in Applied Economics
- Vol. 24 (10) , 1087-1096
- https://doi.org/10.1080/00036849200000001
Abstract
A rationale for including advertising in complete demand systems is presented. An advertising analogue of the Slutsky equation is derived, and properties of the expenditure and indirect utility functions characterized. Empirical estimates of a complete demand system incorporating dynamic advertising effects support neoclassical restrictions; we do not reject homogeneity, or symmetry at the 1% level. This represents surprisingly strong support for neoclassical theory relative to prior parametric studies.Keywords
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