IDEAS home Printed from https://ideas.repec.org/a/aea/aejapp/v8y2016i1p177-92.html
   My bibliography  Save this article

Wintertime for Deceptive Advertising?

Author

Listed:
  • Jonathan Zinman
  • Eric Zitzewitz

Abstract

Casual empiricism suggests that deceptive advertising about product quality is prevalent, and several classes of theories explore its causes and consequences. We provide unusually sharp empirical evidence on its extent, mechanics, and dynamics. Ski resorts self-report substantially more natural snowfall than comparable government sources. The difference is more pronounced on weekends, despite third-party evidence that snowfall is uniform throughout the week—as one would expect given plausibly greater returns to exaggeration on weekends. Exaggeration is greater for resorts that plausibly reap greater benefits from it: those with expert terrain and those not offering money back guarantees. (JEL D83, L15, L83, M37, Z31)

Suggested Citation

  • Jonathan Zinman & Eric Zitzewitz, 2016. "Wintertime for Deceptive Advertising?," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 177-192, January.
    • Handle: RePEc:aea:aejapp:v:8:y:2016:i:1:p:177-92
    Note: DOI: 10.1257/app.20130346
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.20130346
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/app/app/0801/2013-0346_app.pdf
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/app/ds/0801/2013-0346_ds.zip
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/app/data/0801/2013-0346_data.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sauer, Raymond D & Leffler, Keith B, 1990. "Did the Federal Trade Commission's Advertising Substantiation Program Promote More Credible Advertising?," American Economic Review, American Economic Association, vol. 80(1), pages 191-203, March.
    2. Christine Jolls & Cass R. Sunstein, 2006. "Debiasing through Law," The Journal of Legal Studies, University of Chicago Press, vol. 35(1), pages 199-242, January.
    3. Glaeser, Edward L. & Ujhelyi, Gergely, 2010. "Regulating misinformation," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 247-257, April.
    4. Mitchell A. Petersen, 2009. "Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 435-480, January.
    5. Randall S. Cerveny & Robert C. Balling, 1998. "Weekly cycles of air pollutants, precipitation and tropical cyclones in the coastal NW Atlantic region," Nature, Nature, vol. 394(6693), pages 561-563, August.
    6. Sendhil Mullainathan & Joshua Schwartzstein & Andrei Shleifer, 2008. "Coarse Thinking and Persuasion," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 577-619.
    7. Ginger Zhe Jin & Andrew Kato, 2006. "Price, quality, and reputation: evidence from an online field experiment," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 983-1005, December.
    8. Sophia Rabe-Hesketh & Anders Skrondal & Andrew Pickles, 2004. "Generalized multilevel structural equation modeling," Psychometrika, Springer;The Psychometric Society, vol. 69(2), pages 167-190, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sandrini, Luca & Somogyi, Robert, 2023. "Generative AI and deceptive news consumption," Economics Letters, Elsevier, vol. 232(C).
    2. Renatas Kizys & Wael Rouatbi & Zaghum Umar & Adam Zaremba, 2024. "Air temperature and sovereign bond returns," Financial Markets, Institutions & Instruments, John Wiley & Sons, vol. 33(2), pages 179-209, May.
    3. Raymond, Collin & Taylor, Sarah, 2021. "“Tell all the truth, but tell it slant”: Documenting media bias," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 670-691.
    4. Ahlin, Christian & Kim, In Kyung & Kim, Kyoo il, 2021. "Who commits fraud? evidence from korean gas stations," International Journal of Industrial Organization, Elsevier, vol. 76(C).
    5. Umit G. Gurun & Gregor Matvos & Amit Seru, 2016. "Advertising Expensive Mortgages," Journal of Finance, American Finance Association, vol. 71(5), pages 2371-2416, October.
    6. Andrew Rhodes & Chris M. Wilson, 2018. "False advertising," RAND Journal of Economics, RAND Corporation, vol. 49(2), pages 348-369, June.
    7. Yue Wu & Tansev Geylani, 2020. "Regulating Deceptive Advertising: False Claims and Skeptical Consumers," Marketing Science, INFORMS, vol. 39(4), pages 788-806, July.
    8. Marit Hinnosaar & Toomas Hinnosaar, 2024. "Influencer Cartels," Papers 2405.10231, arXiv.org, revised Nov 2024.
    9. Goeschl, Timo, 2019. "Cold Case: The forensic economics of energy efficiency labels for domestic refrigeration appliances," Energy Economics, Elsevier, vol. 84(S1).
    10. Andrea Mangani & Barbara Pacini, 2025. "The Impact of Fines on Deceptive Advertising: Evidence from Italy," Journal of Consumer Policy, Springer, vol. 48(1), pages 23-50, March.
    11. Brandyn F. Churchill & Laura E. Henkhaus & Emily C. Lawler, 2025. "Effect of vaccine recommendations on consumer and firm behavior," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 44(1), pages 125-150, January.
    12. Daniel W. Elfenbein & Raymond Fisman & Brian McManus, 2019. "Does Cheap Talk Affect Market Outcomes? Evidence from eBay," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 305-326, October.
    13. Chen Jin & Luyi Yang & Kartik Hosanagar, 2023. "To Brush or Not to Brush: Product Rankings, Consumer Search, and Fake Orders," Information Systems Research, INFORMS, vol. 34(2), pages 532-552, June.
    14. Zhang, Xiaoheng & Yu, Xiaohua & You, Liangzhi, 2020. "Does the Granary County Subsidy Program Lead to manipulation of grain production data in China?," China Economic Review, Elsevier, vol. 62(C).
    15. Rhodes, Andrew, 2023. "A Survey on Drip Pricing and Other False Advertising," TSE Working Papers 23-1434, Toulouse School of Economics (TSE).
    16. Ho Fai Chan & Bruno S. Frey & Ahmed Skali & Benno Torgler, 2019. "Political Entrenchment and GDP Misreporting," CREMA Working Paper Series 2019-02, Center for Research in Economics, Management and the Arts (CREMA).
    17. Grunewald, Andreas & Kräkel, Matthias, 2022. "Information manipulation and competition," Games and Economic Behavior, Elsevier, vol. 131(C), pages 245-263.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hattori, Keisuke & Higashida, Keisaku, 2014. "Misleading advertising and minimum quality standards," Information Economics and Policy, Elsevier, vol. 28(C), pages 1-14.
    2. Keisuke Hattori & Keisaku Higashida, 2012. "Misleading advertising in duopoly," Canadian Journal of Economics, Canadian Economics Association, vol. 45(3), pages 1154-1187, August.
    3. Kosfeld, Michael & Schüwer, Ulrich, 2011. "Add-on Pricing, Naive Consumers, and the Hidden Welfare Costs of Education," CEPR Discussion Papers 8636, C.E.P.R. Discussion Papers.
    4. Umit G. Gurun & Gregor Matvos & Amit Seru, 2016. "Advertising Expensive Mortgages," Journal of Finance, American Finance Association, vol. 71(5), pages 2371-2416, October.
    5. Glaeser, Edward L. & Ujhelyi, Gergely, 2010. "Regulating misinformation," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 247-257, April.
    6. Rhodes, Andrew, 2023. "A Survey on Drip Pricing and Other False Advertising," TSE Working Papers 23-1434, Toulouse School of Economics (TSE).
    7. Ginger Zhe Jin & Andrew Kato & John A. List, 2010. "That’S News To Me! Information Revelation In Professional Certification Markets," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 104-122, January.
    8. Leye Li & Louise Yi Lu & Dongyue Wang, 2022. "External labour market competitions and stock price crash risk: evidence from exposures to competitor CEOs’ award‐winning events," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1421-1460, April.
    9. Kooyul Jung & Boyoung Kim & Byungmo Kim, 2009. "Tax Motivated Income Shifting and Korean Business Groups (Chaebol)," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(5‐6), pages 552-586, June.
    10. Greg Hebb, 2021. "On the performance of Bank-managed mutual funds: Canadian evidence," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 45(1), pages 22-48, January.
    11. Bradley Blaylock & Bradley P. Lawson & Michael A. Mayberry, 2020. "Taxable income, future profitability, and stock returns," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 47(7-8), pages 858-881, July.
    12. Mark T. Kanazawa, 2019. "Transaction Costs in Water Transfers: The issue of local control," Working Papers 2019-01, Carleton College, Department of Economics.
    13. Boyer, M. Martin & Cowins, Elicia P. & Reddic, Willie D., 2019. "Portfolio rebalancing behavior with operating losses and investment regulation," International Review of Economics & Finance, Elsevier, vol. 63(C), pages 313-328.
    14. Claudia Buch & Catherine Koch & Michael Koetter, 2016. "Crises and rescues: liquidity transmission through international banks," BIS Working Papers 576, Bank for International Settlements.
    15. Caginalp, Gunduz & DeSantis, Mark, 2017. "Does price efficiency increase with trading volume? Evidence of nonlinearity and power laws in ETFs," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 467(C), pages 436-452.
    16. Gary F. Peters & Andrea M. Romi & Juan Manuel Sanchez, 2019. "The Influence of Corporate Sustainability Officers on Performance," Journal of Business Ethics, Springer, vol. 159(4), pages 1065-1087, November.
    17. Ji Seon Yoo & Ye Ji Lee, 2019. "National Culture and Tax Avoidance of Multinational Corporations," Sustainability, MDPI, vol. 11(24), pages 1-28, December.
    18. Martínez-Ferrero, Jennifer & García-Sánchez, Isabel-María, 2017. "Coercive, normative and mimetic isomorphism as determinants of the voluntary assurance of sustainability reports," International Business Review, Elsevier, vol. 26(1), pages 102-118.
    19. Liu, Xueli & Jiang, Chunxia & Wang, Feng & Yao, Shujie, 2021. "The impact of high-speed railway on urban housing prices in China: A network accessibility perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 152(C), pages 84-99.
    20. Yue Zhao & Difang Wan, 2018. "Institutional high frequency trading and price discovery: Evidence from an emerging commodity futures market," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 38(2), pages 243-270, February.

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • Z31 - Other Special Topics - - Tourism Economics - - - Industry Studies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejapp:v:8:y:2016:i:1:p:177-92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.