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Advertising, learning, and consumer choice in experience good markets: an empirical examination *

Advertising, learning, and consumer choice in experience good markets: an empirical examination * This article empirically analyzes different effects of advertising in a nondurable, experience good market. A dynamic learning model of consumer behavior is presented in which I allow both “informative” effects of advertising and “prestige” or “image” effects of advertising. This learning model is estimated using consumer level panel data tracking grocery purchases and advertising exposures over time. Empirical results suggest that in this market, advertising's primary effect was that of informing consumers. The estimates are used to quantify the value of this information to consumers and evaluate the welfare implications of an alternative advertising regulatory regime. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Economic Review Wiley

Advertising, learning, and consumer choice in experience good markets: an empirical examination *

International Economic Review , Volume 44 (3) – Aug 1, 2003

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References (36)

Publisher
Wiley
Copyright
Copyright © 2003 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0020-6598
eISSN
1468-2354
DOI
10.1111/1468-2354.t01-2-00098
Publisher site
See Article on Publisher Site

Abstract

This article empirically analyzes different effects of advertising in a nondurable, experience good market. A dynamic learning model of consumer behavior is presented in which I allow both “informative” effects of advertising and “prestige” or “image” effects of advertising. This learning model is estimated using consumer level panel data tracking grocery purchases and advertising exposures over time. Empirical results suggest that in this market, advertising's primary effect was that of informing consumers. The estimates are used to quantify the value of this information to consumers and evaluate the welfare implications of an alternative advertising regulatory regime.

Journal

International Economic ReviewWiley

Published: Aug 1, 2003

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