Estimating Asymmetric Advertising Response: An Application to U.S. Nonalcoholic Beverage Demand

Yuqing Zheng and Harry Kaiser

Journal of Agricultural and Applied Economics, 2008, vol. 40, issue 3, 13

Abstract: We propose a regime-switching model that allows demand to respond asymmetrically to upward and downward advertising changes. With the introduction of a smooth transition function, the model features smooth rather than abrupt parameter changes between regimes. We apply the model to nonalcoholic beverage data in the United States for 1974 through 2005 to investigate asymmetric advertising response. Results indicate that a decrease in milk advertising had a more profound impact on milk demand than an increase did. An increase in milk advertising had no impact on milk demand, but a decrease could have an own-advertising elasticity up to 0.049.

Keywords: Agribusiness; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (6)

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Journal Article: Estimating Asymmetric Advertising Response: An Application to U.S. Nonalcoholic Beverage Demand (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:joaaec:47262

DOI: 10.22004/ag.econ.47262

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