Intermedia Substitutability and Market Demand by National Advertisers

57 Pages Posted: 29 Nov 2001 Last revised: 25 Oct 2010

See all articles by Alvin J. Silk

Alvin J. Silk

Harvard Business School

Lisa Klein Pearo

Cornell University - School of Hotel Administration

Ernst R. Berndt

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Date Written: December 2001

Abstract

We assess substitutable and complementary relationships among eight national advertising media classes, as well as the magnitude of their own-price elasticities. We use a translog demand model, whose parameters we estimate by three-stage least squares, based on 1960-94 annual U.S. data.We find aggregate demand by national advertisers for each of the eight media is own-price inelastic, and that cross-price elasticities suggest slightly more substitute than complementary relationships, although both are rather weak. These patterns are consistent with long prevailing institutional arrangements and media selection practices.

Suggested Citation

Silk, Alvin J. and Klein Pearo, Lisa and Berndt, Ernst R., Intermedia Substitutability and Market Demand by National Advertisers (December 2001). NBER Working Paper No. w8624. Available at SSRN: https://ssrn.com/abstract=292523

Alvin J. Silk (Contact Author)

Harvard Business School ( email )

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HOME PAGE: http://dor.hbs.edu/fi_redirect.jhtml?facInfo=bio&facEmId=asilk

Lisa Klein Pearo

Cornell University - School of Hotel Administration ( email )

545C Statler Hall
Ithaca, NY 14853-6902
United States

Ernst R. Berndt

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Room E52-452
Cambridge, MA 02142
United States
617-253-2665 (Phone)
617-258-6055 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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