Media Substitution in Advertising: A Spirited Case Study
Mark W. Frank
Sam Houston State University - College of Business Administration - Department of Economics and International Business
August, 29 2008
International Journal of Industrial Organization, Vol. 26, No. 1, 2008
This paper uses an unusually rich sample of liquor brands in the U.S. over the period 1994 to 2004 to test the 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 has also changed substantially following the industry's decision in 1996 to begin using radio and television media. We find that many of 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.
Number of Pages in PDF File: 19
Keywords: Liquor, Advertising, Media substitution, Translog cost function
JEL Classification: L13, L66, M37Accepted Paper Series
Date posted: August 31, 2008
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