IDEAS home Printed from https://ideas.repec.org/a/ush/jaessh/v3y2008i3(5)_fall2008p223-231.html
   My bibliography  Save this article

The Impact Of Advertising On Aggregate Consumption: The Case Of Italy

Author

Listed:
  • Luigi Marattin

Abstract

One of the last assumptions of neoclassical economics that has not yet been fully challenged is the exogeneity of consumers'preferences. In this paper we attempt to verify and measure the effects of advertising on consumers'demand. We do so by carrying out an econometric analysis, relying on a rather simple econometric model on Italian economy, using quarterly data from 1980 to 2000. We build an ADL model with Koyck transformation and different (and advertising-specific) geometrical rates of decline, and we test both the flow-form and the stock form of advertising. Our conclusions show that in the period under consideration advertising had a positive and significant effect on consumption, with short term and long term elasticities equal respectively to 0.034 and 0.16.

Suggested Citation

  • Luigi Marattin, 2008. "The Impact Of Advertising On Aggregate Consumption: The Case Of Italy," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(3(5)_Fall), pages 223-231.
  • Handle: RePEc:ush:jaessh:v:3:y:2008:i:3(5)_fall2008:p:223-231
    as

    Download full text from publisher

    File URL: http://www.jaes.reprograph.ro/articles/4_TheImpactofAdvertisingonAggregateConsumption_TheCaseofItaly.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", pages 112-134.
    2. 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.
    3. Seldom, Barry J. & Jung, Chulho, 1995. "The length of the effect of aggregate advertising on aggregate consumption," Economics Letters, Elsevier, vol. 48(2), pages 207-211, May.
    4. Taylor, Lester D & Weiserbs, Daniel, 1972. "Advertising and the Aggregate Consumption Function," American Economic Review, American Economic Association, vol. 62(4), pages 642-655, September.
    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. Fabio FIORILLO & Marco LILLA & Stefano STAFFOLANI, 2013. "Advertising Has Got You On The Run. Well-Being, Consumption and Leisure in a GE model," Working Papers 389, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    More about this item

    Keywords

    ADL models; advertising; Koyck transformation;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    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:ush:jaessh:v:3:y:2008:i:3(5)_fall2008:p:223-231. 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: (Laura Stefanescu). General contact details of provider: http://edirc.repec.org/data/fmuspro.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.