IDEAS home Printed from https://ideas.repec.org/p/shs/wpaper/0606.html
   My bibliography  Save this paper

Media Substitution in Advertising: A Spirited Case Study

Author

Listed:
  • Mark W. Frank

    (Department of Economics and International Business, Sam Houston State University)

Abstract

This paper uses an unusually rich sample of liquor brands in the U.S. over the period 1994 to 2004 to test substitutability of advertising media. The liquor industry in the U.S. has experienced a substantial increase in case sales and advertising expenditures since the mid-1990s, raising numerous public policy concerns. Moreover, the mix of advertising media used by liquor brands also changed substantially following the industry’s decision in 1996 to begin using radio and television media. We find that the advertising media used by liquor firms are highly substitutable, meaning that partial media bans, such as a ban on television advertising, would prove ineffective in reducing liquor case sales.

Suggested Citation

  • Mark W. Frank, 2006. "Media Substitution in Advertising: A Spirited Case Study," Working Papers 0606, Sam Houston State University, Department of Economics and International Business.
    • Handle: RePEc:shs:wpaper:0606
    as

    Download full text from publisher

    File URL: http://www.shsu.edu/academics/economics-and-international-business/documents/wp_series/wp06-06.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jon Nelson, 2005. "Beer Advertising and Marketing Update: Structure, Conduct, and Social Costs," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 26(3), pages 269-306, December.
    2. Victor J. Tremblay & Carol Horton Tremblay, 2005. "The US Brewing Industry: Data and Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262201518, April.
    3. Henry Saffer, 2000. "Alcohol Advertising And Motor Vehicle Fatalities," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 431-442, August.
    4. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, October.
    5. Henry Saffer & Dhaval Dave, 2002. "Alcohol consumption and alcohol advertising bans," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1325-1334.
    6. Nelson, Jon P. & Young, Douglas J., 2001. "Do Advertising Bans Work? An International Comparison," Working Papers 6-01-1, Pennsylvania State University, Department of Economics.
    7. Berndt, Ernst R & Savin, N Eugene, 1975. "Estimation and Hypothesis Testing in Singular Equation Systems with Autoregressive Disturbances," Econometrica, Econometric Society, vol. 43(5-6), pages 937-957, Sept.-Nov.
    8. Robert N. Horn, 1988. "Analysis," Challenge, Taylor & Francis Journals, vol. 31(4), pages 56-58, July.
    9. Seldon, Barry J. & Jewell, R. Todd & O'Brien, Daniel M., 2000. "Media substitution and economies of scale in advertising," International Journal of Industrial Organization, Elsevier, vol. 18(8), pages 1153-1180, December.
    10. Anderson, Richard G & Thursby, Jerry G, 1986. "Confidence Intervals for Elasticity Estimators in Translog Models," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 647-656, November.
    11. Saffer, Henry, 1991. "Alcohol advertising bans and alcohol abuse: An international perspective," Journal of Health Economics, Elsevier, vol. 10(1), pages 65-79, May.
    12. Alvin Silk & Lisa Klein & Ernst Berndt, 2002. "Intermedia Substitutability and Market Demand by National Advertisers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(4), pages 323-348, June.
    13. Rajeev Goel & Michael Nelson, 2005. "Tobacco policy and tobacco use: differences across tobacco types, gender and age," Applied Economics, Taylor & Francis Journals, vol. 37(7), pages 765-771.
    14. Jon Nelson, 2003. "Advertising Bans, Monopoly, and Alcohol Demand: Testing for Substitution Effects using State Panel Data," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 22(1), pages 1-25, February.
    15. Hirofumi Uzawa, 1962. "Production Functions with Constant Elasticities of Substitution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(4), pages 291-299.
    16. Robert P. Leone, 1995. "Generalizing What Is Known About Temporal Aggregation and Advertising Carryover," Marketing Science, INFORMS, vol. 14(3_supplem), pages 141-150.
    17. Saffer, Henry & Chaloupka, Frank, 2000. "The effect of tobacco advertising bans on tobacco consumption," Journal of Health Economics, Elsevier, vol. 19(6), pages 1117-1137, November.
    18. Seldon, Barry J. & Jung, Chulho, 1993. "Derived demand for advertising messages and substitutability among the media," The Quarterly Review of Economics and Finance, Elsevier, vol. 33(1), pages 71-86.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. He Xi & Lopez Rigoberto & Liu Yizao, 2017. "Are Online and Offline Advertising Substitutes or Complements? Evidence from U.S. Food Industries," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 15(2), pages 1-10, December.
    2. He, Xi & Lopez, Rigoberto A. & Liu, Yizao, 2015. "Substitution between Online and Offline Advertising: Evidence from the Carbonated Soft Drink Industry," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205212, Agricultural and Applied Economics Association.
    3. Sahm, Marco & Greiner, Tanja, 2016. "How Effective Are Advertising Bans? On the Demand for Quality in Two-Sided Media Markets," VfS Annual Conference 2016 (Augsburg): Demographic Change 145724, Verein für Socialpolitik / German Economic Association.
    4. Peter Scott & James Walker, 2010. "Advertising, promotion, and the competitive advantage of interwar British department stores," Economic History Review, Economic History Society, vol. 63(4), pages 1105-1128, November.
    5. Tanja Greiner & Marco Sahm, 2011. "How Effective are Advertising Bans? On the Demand for Quality in Two-Sided Media Markets," CESifo Working Paper Series 3524, CESifo.
    6. Greiner, Tanja & Sahm, Marco, 2018. "How effective are advertising bans? On the demand for quality in two-sided media markets," Information Economics and Policy, Elsevier, vol. 43(C), pages 48-60.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nelson, Jon P., 2001. "Alcohol Advertising and Advertising Bans: A Survey of Research Methods, Results, and Policy Implications," Working Papers 7-01-2, Pennsylvania State University, Department of Economics.
    2. Seldon, Barry J. & Jewell, R. Todd & O'Brien, Daniel M., 2000. "Media substitution and economies of scale in advertising," International Journal of Industrial Organization, Elsevier, vol. 18(8), pages 1153-1180, December.
    3. Eamon Molloy, 2016. "This Ad is for You: Targeting and the Effect of Alcohol Advertising on Youth Drinking," Health Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 148-164, February.
    4. He Xi & Lopez Rigoberto & Liu Yizao, 2017. "Are Online and Offline Advertising Substitutes or Complements? Evidence from U.S. Food Industries," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 15(2), pages 1-10, December.
    5. Sandhu, Gurmit S. & Phillips, W.E. & Percy, Mike, 1992. "Economic Structural Analysis of the Canadian Agricultural Production Sector," Staff Paper Series 232540, University of Alberta, Department of Resource Economics and Environmental Sociology.
    6. Shrihari Sridhar & Srinivasaraghavan Sriram, 2015. "Is online newspaper advertising cannibalizing print advertising?," Quantitative Marketing and Economics (QME), Springer, vol. 13(4), pages 283-318, December.
    7. Fare, Rolf & Grosskopf, Shawna & Seldon, Barry J. & Tremblay, Victor J., 2004. "Advertising efficiency and the choice of media mix: a case of beer," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 503-522, April.
    8. Nelson, Jon P. & Young, Douglas J., 2001. "Do Advertising Bans Work? An International Comparison," Working Papers 6-01-1, Pennsylvania State University, Department of Economics.
    9. Henry Saffer & Dhaval Dave, 2006. "Alcohol advertising and alcohol consumption by adolescents," Health Economics, John Wiley & Sons, Ltd., vol. 15(6), pages 617-637, June.
    10. Shrihari Sridhar & Srinivasaraghavan Sriram, 2015. "Is online newspaper advertising cannibalizing print advertising?," Quantitative Marketing and Economics (QME), Springer, vol. 13(4), pages 283-318, December.
    11. Alvin Silk & Lisa Klein & Ernst Berndt, 2002. "Intermedia Substitutability and Market Demand by National Advertisers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(4), pages 323-348, June.
    12. Han, Han Soo, 1990. "The theoretical input-output system with flexible technological coefficients based on the two-stage level CES-type production function," ISU General Staff Papers 1990010108000010500, Iowa State University, Department of Economics.
    13. Rosemary Avery & Donald Kenkel & Dean Lillard & Alan Mathios, 2007. "Regulating advertisements: the case of smoking cessation products," Journal of Regulatory Economics, Springer, vol. 31(2), pages 185-208, April.
    14. Yijian He & Subhash C. Sharma, 1995. "The Morishima Elasticity of Substitution for the Profit Function," Microeconomics 9502002, University Library of Munich, Germany, revised 17 Feb 1995.
    15. Nuria Badenes-Plá & Andrew M. Jones, 2003. "Addictive goods and taxes: A survey from an economic perspective," Hacienda Pública Española / Review of Public Economics, IEF, vol. 167(4), pages 123-153, December.
    16. Gilligan, Daniel O., 1998. "Farm Size, Productivity, And Economic Efficiency: Accounting For Differences In Efficiency Of Farms By Size In Honduras," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20918, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Paul, Saumik, 2019. "A Decline in Labor's Share with Capital Accumulation and Complementary Factor Inputs: An Application of the Morishima Elasticity of Substitution," IZA Discussion Papers 12219, Institute of Labor Economics (IZA).
    18. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    19. Brox, James A. & Fader, Christina, 1996. "Production elasticity differences between just-in-time and non-just-in-time users in the automotive parts industry," The North American Journal of Economics and Finance, Elsevier, vol. 7(1), pages 77-90.
    20. Lundmark, Robert & Söderholm, Patrik & Lundmark, Robert, 2003. "Structural changes in Swedish wastepaper demand: a variable cost function approach," Journal of Forest Economics, Elsevier, vol. 9(1), pages 41-63.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:shs:wpaper:0606. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Raschke (email available below). General contact details of provider: https://edirc.repec.org/data/deshsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.