Economics at your fingertips  

Does Government-sponsored Advertising Increase Social Welfare? A Theoretical and Empirical Investigation

Carlos Carpio () and Olga Isengildina-Massa

Applied Economic Perspectives and Policy, 2016, vol. 38, issue 2, 239-259

Abstract: The main objective of this study was to analyze the effect of advertising on social welfare in a perfectly competitive market where the level of advertising is chosen by a social planner. The theoretical model revealed that social planner-sponsored advertising that increases the equilibrium price of the advertised good can increase society's welfare if the effect of advertising in consumers' utility is higher than the consumer welfare-reducing price effect. The empirical illustration focuses on the U.S. state of South Carolina's "buy local" food products campaign. The findings suggest that this government-sponsored advertising campaign increases total welfare.

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link) (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Does Government Sponsored Advertising Increase Social Welfare? A Theoretical and Empirical Investigation (2013) Downloads
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:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Applied Economic Perspectives and Policy is currently edited by Timothy Park, Tomislav Vukina and Ian Sheldon

More articles in Applied Economic Perspectives and Policy from Agricultural and Applied Economics Association Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().

Page updated 2018-09-08
Handle: RePEc:oup:apecpp:v:38:y:2016:i:2:p:239-259.