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Advertising’s Elusive Economic Rationale: is there a case for limiting tax relief?

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  • Driver, Ciaran

Abstract

Advertising and its effects have been debated for well over a century. In the last few decades a generally sceptical view of the benefits of advertising has been overturned by a series of academic advances in economics that detail a variety of ways in which advertising may affect the economy and society. This academic work has however been paralleled by a growing popular and political opposition to advertising and its social effects. In this article, the positive economic case for advertising is challenged by an assessment of the main channels of its influence and by a review of the associated empirical findings on its economic and wider impact. A policy response of limiting the tax deductibility of business advertising is explored.

Suggested Citation

  • Driver, Ciaran, 2015. "Advertising’s Elusive Economic Rationale: is there a case for limiting tax relief?," MPRA Paper 68790, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:68790
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    More about this item

    Keywords

    Advertising; Policy; Economic Theory; Industrial Organization; Business Ethics;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • K2 - Law and Economics - - Regulation and Business Law
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General

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