Seasonality and the effect of advertising on price

Research output: Contribution to journalArticlepeer-review

Abstract

Does advertising make markets more or less competitive? This paper lays out an econometric strategy for estimating the effect of advertising on prices that exploits seasonal demand and imperfect targeting of consumers. We find mostly negligible effects of advertising on prices at monthly frequency: among the 35 (of 131) product categories with sufficient advertising seasonality to justify second-stage estimation, only nine have a significant effect, and those are typically small. This finding is essentially the result of the much greater seasonality in advertising than price.

Original languageAmerican English
Pages (from-to)199-222
Number of pages24
JournalJournal of Industrial Economics
Volume63
Issue number1
DOIs
StatePublished - 1 Mar 2015

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Accounting
  • General Business,Management and Accounting

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