Testing A Signaling Theory of Advertising

John Maxwell

No 838, Working Paper from Economics Department, Queen's University

Abstract: The signaling theory of advertising predicts that levels of dissipative advertising may be used by a firm to signal to consumers the quality level of its products. This paper develops such a theory within a durable goods framework. It is shown that, subject to refinements of beliefs, the model predicts a strong positive rank order correlation between firm type and the level of dissipative advertising it conducts. Data on the levels of television and total media advertising as well as quality ratings for different model automobiles sold in Canada over the period (1980-1988) are used to test this result using nonparametric procedures.

Date: 1991-10
References: Add references at CitEc
Citations:

Downloads: (external link)
http://qed.econ.queensu.ca/working_papers/papers/qed_wp_838.pdf First version 1991 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:838

Access Statistics for this paper

More papers in Working Paper from Economics Department, Queen's University Contact information at EDIRC.
Bibliographic data for series maintained by Mark Babcock ().