Television Advertising and Soda Demand

Rigoberto Lopez, Yizao Liu () and Chen Zhu

No 124445, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: This study examines the effects of television advertising on consumer demand for carbonated soft drinks using a random coefficients logit model (BLP) with household and advertising data from seven U.S. cities over a three year period. We find that advertising decreases the price elasticity of demand, indicating that advertising plays predominantly a persuasive, therefore anti-competitive role in this market. Further results show that brand spillover effects are significant and that measuring advertising with gross rating points (GRPs) outperforms measuring it with expenditures, as is conventionally done. Finally, simulation results indicate that eliminating all television advertising would lower market shares of sodas as consumers migrate to other beverages such as juices, water and milk

Keywords: Demand and Price Analysis; Industrial Organization; Marketing (search for similar items in EconPapers)
Pages: 1
Date: 2012-06-01
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:124445

DOI: 10.22004/ag.econ.124445

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