Investigating the advertising-sales relationship in the Lydia Pinkham data: a bootstrap approach
The dynamic relationship between advertising and sales in the annual Lydia Pinkham data is re-evaluated. Past studies have found a feedback system, although one-way causality from advertising to sales is expected. The bootstrap method is used in this paper as an alternative to the asymptotic method exclusively adopted by past studies. The impulse response analysis based on bivariate autoregressive (AR) model is conducted. Bootstrap-after-bootstrap confidence intervals on impulse responses provide evidence that sales do not cause advertising, contrary to the findings of past studies. Comparison of bootstrap-after-bootstrap prediction intervals calculated from univariate and bivariate AR models further supports this finding. Overall, this paper finds evidence of one-way causality from advertising to sales.
Volume (Year): 37 (2005)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin Eichenbaum & Charles L. Evans, 1995. "Some Empirical Evidence on the Effects of Shocks to Monetary Policy on Exchange Rates," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 975-1009.
- Engle, Robert & Granger, Clive, 2015.
"Co-integration and error correction: Representation, estimation, and testing,"
Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-276, March.
- Ashley, R & Granger, C W J & Schmalensee, R, 1980. "Advertising and Aggregate Consumption: An Analysis of Causality," Econometrica, Econometric Society, vol. 48(5), pages 1149-1167, July.
- Jeremy Berkowitz & Lutz Kilian, 1996.
"Recent developments in bootstrapping time series,"
Finance and Economics Discussion Series
96-45, Board of Governors of the Federal Reserve System (U.S.).
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:37:y:2005:i:3:p:347-354. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.