Environmental Impacts of Banning Vehicle Advertising

Christoph Walsh and Jiekai Zhang

No 20393, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a structural model of demand and pricing of vehicles which incorporates the heterogeneous effects of advertising. We estimate the model using rich data on sales and advertising at the age-group and product level from 2012-2021 in France. We disentangle the positive spillover effects of advertising from its business-stealing effects and find that advertising has a positive effect on vehicle sales and reduces consumers' price sensitivity. Our counterfactual simulations show that an outright ban on advertising does not lead to positive environmental effects. Instead, targeted advertising bans on high-emission and high-weight vehicles are more effective at reducing emissions.

Keywords: Advertising; Vehicles (search for similar items in EconPapers)
JEL-codes: L13 L51 M37 Q51 (search for similar items in EconPapers)
Date: 2025-07
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