Research ArticleOpen AccessGoogle Scholar indexed
Advertisement Spending and Income: An Aggregative Analysis
Faculty of Agribusiness and Commerce, Lincoln University, Christchurch, New Zealand
Faculty of Agribusiness and Commerce, Lincoln University, Christchurch, New Zealand
- 1 Faculty of Agribusiness and Commerce, Lincoln University, Christchurch, New Zealand
- 2 Faculty of Agribusiness and Commerce, Lincoln University, Christchurch, New Zealand
Theoretical Economics Letters·Volume 06 (2016)·Pages 356–366·Published 31 March 2016·DOI10.4236/tel.2016.62040
Copy link · social · email
Abstract
Existing studies tend to investigate cross-sectional relations between GDP and advertisement at the firm or industry level. The present study focuses on the long-run relation between GDP and aggregate advertisement spending using United States data for the period 1900-2007. Granger causality tests indicate the temporal precedence of GDP. A cointegration analysis shows that, as GDP increases, it causes advertisement spending to increase at a rate faster than its own growth. Faster growth relative to GDP is accompanied with a negative autonomous trend of advertisement spending. This trend appears consistent with the continuous technical progress in advertisement.
KeywordsAdvertisement SpendingGDPGranger CausalityCointegration
- Chamberlin, E. (1933) The Theory of Monopolistic Competition. Harvard University Press, Cambridge, MA.
- Sherman, S.A. (1900) Advertising in the United States. Publications of the American Statistical Association, 7, 1-44. http://dx.doi.org/10.2307/2276425
- Presbrey, F. (1929) The History and Development of Advertising. Greenwood Press, New York.
- Garvey, E.G. (1996) The Adman in the Parlor: Magazines and the Gendering of Consumer Culture, 1880s to 1910s. Oxford University Press, New York. http://dx.doi.org/10.1093/acprof:oso/9780195108224.001.0001
- Schmalensee, R. (1972) The Economics of Advertising. North Holland, Amsterdam.
- Albert, A. and Reid, B. (2011) The Contribution of the Advertising Industry to the UK Economy. Credos. http://www.credos.org.uk/write/Images/ThecontributionofadvertisingtotheUKeconomy311011.pdf
- Raimondi, M.J. and Klein, L. (2004) Comprehensive Economic Impact of Advertising Expenditures, Association of National Advertisers, Global Insights Group. http://bit.ly/gUrHde
- Bain, J.S. (1956) Barriers to New Competition: Their Character and Consequences in Manufacturing Industries. Harvard University Press, Cambridge, MA. http://dx.doi.org/10.4159/harvard.9780674188037
- Comanor, W.S. and Wilson, T.A. (1967) Advertising, Market Structure and Performance. The Review of Economics and Statistics, 49, 423-440. http://dx.doi.org/10.2307/1928327
- Schmalensee, R. (1989) Inter-Industry Studies of Structure and Performance. In: Schmalensee, R. and Willig, R., Eds. Handbook of Industrial Organization, North-Holland, Amsterdam, Vol. 1, 475-535.
- Bagwell, K. (2007) The Economic Analysis of Advertising. In: Armstrong, M. and Porter, R., Eds., Handbook of Industrial Organization, Vol. 3, North-Holland, Amsterdam, 1701-1844.
- Braithwaite, D. (1928) The Economic Effects of Advertisement. Economic Journal, 38, 16-37. http://dx.doi.org/10.2307/2224394
- Nelson, P. (1974) Advertising as Information. Journal of Political Economy, 82, 729-754. http://dx.doi.org/10.1086/260231
- Nelson, P. (1970) Information and Consumer Behavior. Journal of Political Economy, 78, 311-329. http://dx.doi.org/10.1086/259630
- Nelson, P. (1974) The Economic Value of Advertising. In: Brozen, Y., Ed., Advertising and Society, New York University Press, New York, 43-66.