Files
Abstract
This paper tests for the influence of advertising on the inter-product distribution of consumer demand for non-durable goods
and services in the UK, 1963-1996. The long-run demand for seven categories of non-durable products is modelled through an
advertising-augmented version of the almost ideal demand system (AIDS), which is incorporated into an error-correction model
to allow for short-run dynamic adjustments to long-run equilibrium positions. Model estimates confirm that the restrictions
of price homogeneity and symmetry appear to be consistent with the data, yield measures of the various types of demand
elasticity that are in general plausible, confirm the strong influence of prices on the allocation of consumer expenditure, but
find little evidence to support the hypothesis that advertising has the power to effect marked changes in the inter-product
pattern of consumer demand in the UK.
© 2002 Elsevier Science B.V. All rights reserved.