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Environmental Impacts of Banning Vehicle Advertising

Author

Listed:
  • Walsh, Christoph
  • Zhang, Jiekai

Abstract

We develop a structural model of demand and pricing of vehicles which incorporates the heterogeneous effects of advertising. We estimate the model using rich data on sales and advertising at the age-group and product level from 2012-2021 in France. We disentangle the positive spillover effects of advertising from its business-stealing effects and find that advertising has a positive effect on vehicle sales and reduces consumers' price sensitivity. Our counterfactual simulations show that an outright ban on advertising does not lead to positive environmental effects. Instead, targeted advertising bans on high-emission and high-weight vehicles are more effective at reducing emissions.

Suggested Citation

  • Walsh, Christoph & Zhang, Jiekai, 2025. "Environmental Impacts of Banning Vehicle Advertising," CEPR Discussion Papers 20393, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20393
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    File URL: https://cepr.org/publications/DP20393
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    Keywords

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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