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By J.P. Nelson, Michael R. Baye

ISBN-10: 0080545939

ISBN-13: 9780080545936

ISBN-10: 0762308230

ISBN-13: 9780762308231

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For a clear discussion of the distinction between the absolute- and relative-price versions of the Rotterdam model, see Selvanathan (1989). 3. Technically, Selvanathan’s (1989, p. 218) symmetry condition is ␤ij ≤ ␤ji for all i, j. The more stringent restriction (4c) is consistent with Theil’s (1980) model, which is based on a stronger assumption about how advertising affects marginal utilities than Selvanathan’s. 4. The sample covers a period of substantial changes in the level of soft drink and milk advertising.

1987). Advertising and the Inter-Product Distribution of Demand: A Rotterdam Model Approach. European Economic Review, 31, 1051–1070. 22 HENRY W. KINNUCAN ET AL. Duffy, M. (1989). Measuring the Contribution of Advertising to Growth in Demand: An Econometric Accounting Framework. International Journal of Advertising, 8, 95–110. Duffy, M. (1990). : Some Further Rotterdam Model Estimates. International Journal of Advertising, 9, 247–257. Duffy, M. (1991). Advertising in Demand Systems: Testing a Galbraithian Hypothesis.

LONG-RUN BEVERAGE DEMAND In this section, we estimate the long-run demand for each beverage using the full-information maximum likelihood estimator derived by Johansen (1988, 1991). Estimates of the corresponding long-run demand elasticities are obtained, as are estimates of the associated short-run responses. In the interest of space, only the main results from the VEC models will be discussed. Long-Run Demand Elasticities For each beverage, two VEC models were estimated: one without lagged difference terms, and another containing a single lagged difference of each explanatory variable.

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Advertising and Differentiated Products (Advances in Applied Microeconomics, Vol. 10) by J.P. Nelson, Michael R. Baye


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