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Substitution between Online and Offline Advertising: Evidence from the Carbonated Soft Drink Industry

Author

Listed:
  • He, Xi

    (University of Connecticut)

  • Lopez, Rigoberto A.

    (University of Connecticut)

  • Liu, Yizao

    (University of Connecticut)

Abstract

This paper uses data collected from hypothetical and non-hypothetical choice-based conjoint survey instruments to estimate willingness to pay for distance-based local food products. The survey was administered to three different groups of respondents: members of a consumer buying club with local and grass-fed market experience, a random sample of Maryland residents, and shoppers at a non-specialty suburban Maryland grocery store. We find that both the random sample of Maryland residents and the grocery store shoppers are willing to pay a premium for local products, but view local and grass-fed production as substitutes. Conversely, members of the consumer buying club are willing to pay significantly less for local than their counterparts, but do not conflate local with other premium attributes, such as grass-fed production.

Suggested Citation

  • He, Xi & Lopez, Rigoberto A. & Liu, Yizao, 2015. "Substitution between Online and Offline Advertising: Evidence from the Carbonated Soft Drink Industry," Working Papers 37, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    • Handle: RePEc:zwi:wpaper:37
    as

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    File URL: http://zwickcenter.uconn.edu/working_papers_8_1393693274.pdf
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    References listed on IDEAS

    as
    1. Avi Goldfarb & Catherine Tucker, 2011. "Substitution Between Offline And Online Advertising Markets," Journal of Competition Law and Economics, Oxford University Press, vol. 7(1), pages 37-44.
    2. Avi Goldfarb, 2014. "What is Different About Online Advertising?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(2), pages 115-129, March.
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    10. Mr. Marco Marini & Mr. Tommaso Di Fonzo, 2012. "On the Extrapolation with the Denton Proportional Benchmarking Method," IMF Working Papers 2012/169, International Monetary Fund.
    11. Dirk Bergemann & Alessandro Bonatti, 2011. "Targeting in advertising markets: implications for offline versus online media," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 417-443, September.
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    Cited by:

    1. Bo Chen & Wuyang Hu & Qingjie Zhou, 2020. "Effects of local and national advertising across brands: the case of yogurt in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1260-1281, October.

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    More about this item

    Keywords

    Online advertising; media substitution; translog cost function; CSDs;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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