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Advertising Restrictions and Concentration: The Case of Malt Beverages

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  • Sass, Tim R
  • Saurman, David S

Abstract

The relationship between state-imposed advertising restrictions and state-level market concentration in the malt beverage industry is examined. The authors find that the presence of proscriptions on price advertising significantly increases market concentration at the state level, both absolutely and relative to a measure of national concentration. The evidence also indicates that banning local nonprice advertising in addition to price advertising yields no marginal significant change in either measure of state-level concentration. Analysis of individual brewers' market shares suggests that large national brewers gain at the expense of smaller brewers when price advertising is restricted. Copyright 1995 by MIT Press.

Suggested Citation

  • Sass, Tim R & Saurman, David S, 1995. "Advertising Restrictions and Concentration: The Case of Malt Beverages," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 66-81, February.
  • Handle: RePEc:tpr:restat:v:77:y:1995:i:1:p:66-81
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    Cited by:

    1. C. Robert Clark, 2007. "Advertising Restrictions and Competition in the Children’s Breakfast Cereal Industry," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 757-780.
    2. Dubois, Pierre & Griffith, Rachel & O'Connell, Martin, 2014. "The Effects of Banning Advertising on Demand, Supply and Welfare: Structural Estimation on a Junk Food Market," TSE Working Papers 14-485, Toulouse School of Economics (TSE).
    3. Michael Cohen & Rui Huang, 2012. "Corporate Social Responsibility for Kids’ Sake: A Dynamic Model of Firm Participation," Working Papers 12, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    4. repec:bla:randje:v:47:y:2016:i:4:p:1029-1056 is not listed on IDEAS
    5. Ulrich Doraszelski & Sarit Markovich, 2007. "Advertising dynamics and competitive advantage," RAND Journal of Economics, RAND Corporation, vol. 38(3), pages 557-592, September.
    6. Simon P. Anderson & Federico Ciliberto & Jura Liaukonyte & Régis Renault, 2016. "Push-me pull-you: comparative advertising in the OTC analgesics industry," RAND Journal of Economics, RAND Corporation, vol. 47(4), pages 1029-1056, November.
    7. repec:oup:restud:v:85:y:2018:i:1:p:396-436. is not listed on IDEAS
    8. Victor J. Tremblay & Kumiko Okuyama, 2001. "Advertising Restrictions, Competition, And Alcohol Consumption," Contemporary Economic Policy, Western Economic Association International, vol. 19(3), pages 313-321, July.
    9. Pierre Dubois & Rachel Griffith & Martin O’Connell, 2018. "The Effects of Banning Advertising in Junk Food Markets," Review of Economic Studies, Oxford University Press, vol. 85(1), pages 396-436.
    10. David Paton, 1998. "Who A dvertises Prices? A Firm Level Study Based on Survey Data," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 5(1), pages 57-75.
    11. Ulrich Doraszelski & Sarit Markovich, 2004. "Advertising Dynamics and Competitive Advantage," Computing in Economics and Finance 2004 61, Society for Computational Economics.
    12. C. Robert Clark, 2003. "Advertising Restrictions and Competition in the Children's Breakfast Cereal Industry / Restrictions et compétition publicitaire dans l'industrie des céréales pour enfants," CIRANO Working Papers 2003s-30, CIRANO.
    13. Nelson, Jon P., 2001. "Advertising Bans, Monopoly, and Alcohol Demand: Testing for Substitution Effects Using Panel Data," Working Papers 1-01-1, Pennsylvania State University, Department of Economics.
    14. Jon Nelson, 2003. "Advertising Bans, Monopoly, and Alcohol Demand: Testing for Substitution Effects using State Panel Data," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 22(1), pages 1-25, February.
    15. Michael Cohen & Rui Huang & Chen Zhu, 2012. "The Use of Voluntary Marketing Initiatives to Improve the Nutritional Profile of Kids Cereals," Working Papers 11, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.

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