Alternative specifications of advertising in the Rotterdam model

Mark G. Brown and Jonq-Ying Lee

No 52717, Research papers from Florida Department of Citrus

Abstract: This paper examines several approaches to introduce advertising in systems of demand equations. Advertising is included in the Rotterdam model using an unrestricted specification and three restricted specifications - advertising affects demand alternatively through (1) marginal utilities as in studies by Duffy (1987, 1989, 1990) and Selvanathan (1989), (2) scaling parameters which can be viewed as indicators of product quality, and (3) translation parameters which can be viewed as indicators of basic needs. A test to choose among the alternative specifications is provided and the methodology is applied to data on demand for fruit juice products.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:ags:fdcrrp:52717

DOI: 10.22004/ag.econ.52717

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