Intermedia Substitutability and Market Demand by National Advertisers
We assess substitutable and complementary relationships among eight national advertising media classes, as well as the magnitude of their own-price elasticities. We use a translog demand model, whose parameters we estimate by three-stage least squares, based on 1960-94 annual U.S. data.We find aggregate demand by national advertisers for each of the eight media is own-price inelastic, and that cross-price elasticities suggest slightly more substitute than complementary relationships, although both are rather weak. These patterns are consistent with long prevailing institutional arrangements and media selection practices.
|Date of creation:||Dec 2001|
|Date of revision:|
|Publication status:||published as Silk, Alvin J., Lisa R. Klein and Ernst R. Berndt. "Intermedia Substitutability And Market Demand By National Advertisers," Review of Industrial Organization, 2002, v20(4,Jun), 323-348.|
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- Nelson, Phillip J, 1975. "The Economic Consequences of Advertising," The Journal of Business, University of Chicago Press, vol. 48(2), pages 213-41, April.
- J. A. Hausman, 1976.
"Specification Tests in Econometrics,"
185, Massachusetts Institute of Technology (MIT), Department of Economics.
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