Alternative specifications of advertising in the Rotterdam model

This paper examines several approaches to introduce advertising in systems of demand equations. Advertising is included in the Rotterdam model using an unrestricted specification and three restricted specifications - advertising affects demand alternatively through (1) marginal utilities as in studies by Duffy (1987, 1989, 1990) and Selvanathan (1989), (2) scaling parameters which can be viewed as indicators of product quality, and (3) translation parameters which can be viewed as indicators of basic needs. A test to choose among the alternative specifications is provided and the methodology is applied to data on demand for fruit juice products.


Issue Date:
1991
Publication Type:
Report
PURL Identifier:
http://purl.umn.edu/52717
Page range:
26
Series Statement:
Research Papers
1991-4




 Record created 2017-04-01, last modified 2017-12-10

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