Advertising effects in complete demand systems Academic Article uri icon


  • A rationale for including advertising in complete demand systems is presented. An advertising analogue of the Slutsky equation is derived, and properties of the expenditure and indirect utility functions characterized. Empirical estimates of a complete demand system incorporating dynamic advertising effects support neoclassical restrictions; we do not reject homogeneity, or symmetry at the 1% level. This represents surprisingly strong support for neoclassical theory relative to prior parametric studies. © 1992, Taylor & Francis Group, LLC. All rights reserved.

author list (cited authors)

  • Baye, M. R., Jansen, D. W., & Lee, J.

citation count

  • 20

publication date

  • October 1992