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Expenditure trends in US advertising : long-term effects and structural changes with new media introductions

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  • Esteban-Bravo, Mercedes
  • Vidal-Sanz, Jose M.
  • Yildirim, Gökhan

Abstract

Historically US Media channels have competed to attract advertising expenditure from marketing. This has been a fierce battle, where, every few years, incumbents have been shattered by the introduction of a new media such as TV, Yellow Pages, Cable and the Internet. In this paper we will analyze and discuss the dynamic trend in advertising expenditure for ten different advertising media channels in the U.S., by estimating the long-term equilibrium between these time series, and their equilibrium cross-elasticities. We will also analyze how they are related to the business cycle, both at the aggregated level and specifically for each media. To this end, it is crucial to consider simultaneously the impact of new media introductions over the incumbents, estimating the potential effects of structural changes. Both, the introduction effects and the long-term equilibrium relationship between two media can be very different. In particular, we will study the influence of the Internet

Suggested Citation

  • Esteban-Bravo, Mercedes & Vidal-Sanz, Jose M. & Yildirim, Gökhan, 2012. "Expenditure trends in US advertising : long-term effects and structural changes with new media introductions," DEE - Working Papers. Business Economics. WB wb121506, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
  • Handle: RePEc:cte:wbrepe:wb121506
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    References listed on IDEAS

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    1. Håvard Hungnes, 2010. "Identifying Structural Breaks in Cointegrated Vector Autoregressive Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(4), pages 551-565, August.
    2. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
    3. Pesaran, M. Hashem & Shin, Yongcheol & Smith, Richard J., 2000. "Structural analysis of vector error correction models with exogenous I(1) variables," Journal of Econometrics, Elsevier, vol. 97(2), pages 293-343, August.
    4. Søren Johansen & Rocco Mosconi & Bent Nielsen, 2000. "Cointegration analysis in the presence of structural breaks in the deterministic trend," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 216-249.
    5. G. Dekimpe, Marnik & Hanssens, Dominique M. & Silva-Risso, Jorge M., 1998. "Long-run effects of price promotions in scanner markets," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 269-291, November.
    6. Campos, Julia & Ericsson, Neil R. & Hendry, David F., 1996. "Cointegration tests in the presence of structural breaks," Journal of Econometrics, Elsevier, vol. 70(1), pages 187-220, January.
    7. repec:eee:ijrema:v:25:y:2008:i:3:p:173-182 is not listed on IDEAS
    8. Søren Johansen & Rocco Mosconi & Bent Nielsen, 2000. "Cointegration analysis in the presence of structural breaks in the deterministic trend," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 216-249.
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    Keywords

    Advertising Expenditure;

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