Causality Among Sales,Advertising and Prices: New Evidence from a Multivariate Cointegrated System

Francisco F. R. Ramos
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Francisco F. R. Ramos: Faculty of Economics University of Porto Portugal

Econometrics from University Library of Munich, Germany

Abstract: The main purpose of this paper is to discern the dynamic causal relationships (in the Granger (temporal) sense) among sales, advertising and prices in the context of the Portuguese car market. The present research (based on multiple cointegration tests preceded by various unit root or non-stationarity tests) is one of the first attempts at putting the sales-marketing mix analysis within a multivariate cointegrated system. The results, based on a three-step procedure (cointegration, VECM and VDCs) confirm that a strong one-way relationship (A->S, A->P) between advertising and sales (prices) is complemented by a feedback relationship (S P) between sales and prices.

Keywords: Car market; cointegration analysis; Granger-causality; marketing-mix; variance decompositions; vector error-correction model (search for similar items in EconPapers)
JEL-codes: C32 D49 M31 M37 (search for similar items in EconPapers)
Pages: 12 pages
Date: 1996-12-09
Note: Type of Document - Winword 2.0; prepared on IBM PC ; to print on HP; pages: 12
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