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Advertising and food, drink and tobacco consumption in the United Kingdom: a dynamic demand system

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  • Duffy, Martyn

Abstract

This paper tests for the influence of advertising on the inter-product distribution of consumer demand for non-durable goods and services in the UK, 1963-1996. The long-run demand for seven categories of non-durable products is modelled through an advertising-augmented version of the almost ideal demand system (AIDS), which is incorporated into an error-correction model to allow for short-run dynamic adjustments to long-run equilibrium positions. Model estimates confirm that the restrictions of price homogeneity and symmetry appear to be consistent with the data, yield measures of the various types of demand elasticity that are in general plausible, confirm the strong influence of prices on the allocation of consumer expenditure, but find little evidence to support the hypothesis that advertising has the power to effect marked changes in the inter-product pattern of consumer demand in the UK. © 2002 Elsevier Science B.V. All rights reserved.

Suggested Citation

  • Duffy, Martyn, 2003. "Advertising and food, drink and tobacco consumption in the United Kingdom: a dynamic demand system," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 28(1), January.
  • Handle: RePEc:ags:iaaeaj:177858
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    References listed on IDEAS

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    1. Abigail Tiffin & Richard Tiffin, 1999. "Estimates of Food Demand Elasticities for Great Britain: 1972-1994," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(1), pages 140-147.
    2. Duffy, Martyn, 1995. "Advertising in demand systems for alcoholic drinks and tobacco: A comparative study," Journal of Policy Modeling, Elsevier, vol. 17(6), pages 557-577, December.
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    Citations

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    Cited by:

    1. Denton, Frank T. & Mountain, Dean C., 2011. "Exploring the effects of aggregation error in the estimation of consumer demand elasticities," Economic Modelling, Elsevier, vol. 28(4), pages 1747-1755, July.
    2. repec:eee:touman:v:36:y:2013:i:c:p:247-256 is not listed on IDEAS
    3. David Aristei & Luca Pieroni, 2010. "Habits, Complementarities and Heterogeneity in Alcohol and Tobacco Demand: A Multivariate Dynamic Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(4), pages 428-457, August.
    4. Rangkakulnuwat, Poomthan & Wang, H. Holly & Ahn, Sung K., 2007. "The inverse imported factor demand system in Thailand: A cointegration analysis," Economics Letters, Elsevier, vol. 94(3), pages 402-407, March.
    5. Frank T. Denton & Dean C. Mountain, 2007. "Exploring the Effects of Aggregation Error in the Estimation of Consumer Demand Elasticities," Social and Economic Dimensions of an Aging Population Research Papers 226, McMaster University.
    6. Silva, Andres & Garcia, Marian & Bailey, Alastair, 2012. "The Impact of Child Obesity News on Household Food Expenditure in the United Kingdom," 2012 AAEA/EAAE Food Environment Symposium, May 30-31, Boston, MA 123526, Agricultural and Applied Economics Association.
    7. repec:eee:touman:v:45:y:2014:i:c:p:159-170 is not listed on IDEAS

    More about this item

    Keywords

    Advertising; Error-correction models; Demand system; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; C3; D12; 118; M3;

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising

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