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Abstract
Buse’s concept of total response is extended to advertising effects. Results suggest that partial
advertising elasticities overstate advertising’s ability to increase market demand. One
implication is that advertising bans (e.g., for alcohol and tobacco) are apt to be less effective than
indicated by partial advertising elasticities estimated from econometric models. Extending the
concept of total response to price effects, the total advertising “flexibility” sets the lower bound
on the optimal advertising-sales ratio and subsumes the Dorfman-Steiner and Nerlove-Waugh
theorems as special cases. Applying the total flexibility concept to U.S. meats, results suggest
the beef, pork and poultry industries are under-investing in advertising. However, in the case of
beef this conclusion hinges on the assumption that retaliation by pork brand advertisers is
minimal, which needs to be tested.