Using panel data to determine the effect of advertising on brand-level distilled spirits sales
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1Department of Economics, Quinnipiac College, Hamden, Connecticut 06518, USA.
Objective:
The purpose of the present study is to determine the effect that brand-level advertising has on brand-level spirits demand.
Methods:
Using a panel data set consisting of 16 brands and 14 years of data, a fixed effects model of brand-level spirits demand was estimated.
Results:
It was found that own-brand advertising, income, rival-brand price, a time trend and brand loyalty all have a significant effect on brand-level spirits demand.
Conclusions:
These results indicate that brand-level spirits advertising results only in brand switching and does not increase the overall size of the market.
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