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Celebrity endorsement has become a prevalent form of advertising in the United States. Despite extensive literature on the effects of celebrity endorsements on consumers’ brand attitudes and purchase intentions, little is known about the economic value of these endorsements. Research on this topic has typically focused on theories explaining how celebrity endorsements influence consumers’ attitudes and intentions. The authors assess the impact of celebrity endorsement contracts on the expected profitability of a firm by using event study methodology. Their approach assumes that the announcement of a celebrity endorsement contract, usually widely publicized in the business press, is used as information by market analysts to evaluate the potential profitability of endorsement expenditures, thereby affecting the firm's expected return. Announcements of 110 celebrity endorsement contracts were analyzed. Results indicate that, on average, the impact of these announcements on stock returns is positive and suggest that celebrity endorsement contracts are generally viewed as a worthwhile investment in advertising.

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A quantity surcharge exists when the unit cost of a given brand is higher for a large package than for a small one. This paper examines some product and household characteristics that influence observed quantity surcharging practices. Results indicate that the propensity to buy a large package of a product is positively influenced by the extent of a household's usage of that product, procurement cost, and carrying capacity and is negatively influenced by the propensity to price search. A retailer's decision to levy a quantity surcharge is, in turn, influenced by demand for the product, the propensity to buy large packages, and to some extent the product's carrying cost.