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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
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    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.

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    File URL: http://purl.umn.edu/177858
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    Article provided by International Association of Agricultural Economists in its journal Agricultural Economics of Agricultural Economists.

    Volume (Year): 28 (2003)
    Issue (Month): 1 (January)
    Pages:

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    Handle: RePEc:ags:iaaeaj:177858
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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.
    3. Hylleberg, S. & Engle, R. F. & Granger, C. W. J. & Yoo, B. S., 1990. "Seasonal integration and cointegration," Journal of Econometrics, Elsevier, vol. 44(1-2), pages 215-238.
    4. Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
    5. Ghysels, Eric & Lee, Hahn S. & Noh, Jaesum, 1994. "Testing for unit roots in seasonal time series : Some theoretical extensions and a Monte Carlo investigation," Journal of Econometrics, Elsevier, vol. 62(2), pages 415-442, June.
    6. Lariviere, Eric & Larue, Bruno & Chalfant, Jim, 2000. "Modeling the demand for alcoholic beverages and advertising specifications," Agricultural Economics, Blackwell, vol. 22(2), pages 147-162, March.
    7. Lariviere, Eric & Larue, Bruno & Chalfant, Jim, 2000. "Modeling the demand for alcoholic beverages and advertising specifications," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 22(2), March.
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    9. Gordon Anderson & Richard Blundell, 1983. "Testing Restrictions in a Flexible Dynamic Demand System: An Application to Consumers' Expenditure in Canada," Review of Economic Studies, Oxford University Press, vol. 50(3), pages 397-410.
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    11. Walsh, Brendan M, 1982. "The Demand for Alcohol in the UK: A Comment," Journal of Industrial Economics, Wiley Blackwell, vol. 30(4), pages 439-446, June.
    12. Anderson, G J & Blundell, R W, 1982. "Estimation and Hypothesis Testing in Dynamic Singular Equation Systems," Econometrica, Econometric Society, vol. 50(6), pages 1559-1571, November.
    13. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    14. Osborn, Denise R, et al, 1988. "Seasonality and the Order of Integration for Consumption," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 50(4), pages 361-377, November.
    15. Wu, De-Min, 1983. "A remark on a generalized specification test," Economics Letters, Elsevier, vol. 11(4), pages 365-370.
    16. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    17. S. E. Pudney, 1981. "An Empirical Method of Approximating the Separable Structure of Consumer Preferences," Review of Economic Studies, Oxford University Press, vol. 48(4), pages 561-577.
    18. Martyn Duffy, 2001. "Advertising in consumer allocation models: choice of functional form," Applied Economics, Taylor & Francis Journals, vol. 33(4), pages 437-456.
    19. Anderson, Gordon & Blundell, Richard, 1984. "Consumer Non-Durables in the U.K. A Dynamic Demand System," Economic Journal, Royal Economic Society, vol. 94(376a), pages 35-44, Supplemen.
    20. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    21. Duffy, Martyn, 1991. "Advertising and the Consumption of Tobacco and Alcoholic Drink: A System-Wide Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(4), pages 369-385, November.
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