Advertising and the US market demand for beer

Lee, Byunglak; Tremblay, Victor J.

doi:10.1080/00036849200000104

Cited by 67 publications

(37 citation statements)

References 35 publications

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“…This is contrary to earlier literature that advertising does not stimulate the demand for beer (Nelson, 1999;Nelson and Moran, 1995;Lee and Tremblay, 1992; and references cited therein). This argument was used by the Federal Trade Commission in a case that dealt with a petition from the Center for Science in the Public Interest (CSPI) in 1983 to ban broadcast advertising of alcohol (including beer) (Center for Science in the Public Interest, 1983).…”

Section: Summary and Discussioncontrasting

confidence: 56%

Demand for differentiated products: Price and advertising evidence from the U.S. beer market

Rojas

Peterson

2008

International Journal of Industrial Organization

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This paper employs a nation-wide sample of supermarket scanner data to estimate a large brand-level demand system for beer in the U.S. using the Distance Metric method of Pinkse, Slade and Brett [Pinkse, J., Slade, M., Brett, C., 2002. Spatial price competition: a semiparametric approach. Econometrica 70, 1111-1155]. Unlike previous studies, this work estimates the own-and cross-advertising elasticities in addition to price elasticities. Positive and negative cross-advertising elasticities imply the presence of both cooperative and predatory effects of advertising expenditures across brands; however, the former effect appears to dominate suggesting that advertising increases the overall demand for beer. We discuss the implications of these results in this industry.

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Section: Summary and Discussioncontrasting

confidence: 56%

Demand for differentiated products: Price and advertising evidence from the U.S. beer market

Rojas

Peterson

2008

International Journal of Industrial Organization

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“…Duffy (1982) finds that income is a crucial variable in determining demand, while the price of goods and of their substitutes is less influential. Lee and Tremblay's (1992) results lead to the opposite conclusions.…”

Section: Different Approaches To Estimate Alcohol Demandcontrasting

confidence: 40%

“…While McGuinness (1980) and Walsh (1982) results show that advertising has a positive and significant effect on the alcohol demand, Duffy (1982) and Lee and Tremblay (1992) find no empirical evidence of the effect of advertising on the beer demand. The results of these studies vary depending on the influence of other demand variables.…”

Section: Different Approaches To Estimate Alcohol Demandmentioning

confidence: 68%

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The demand for beer in presence of past consumption and advertising in the Czech Republic

Castiglione¹,

Grochová²,

Infante³

et al. 2011

Agric. Econ. - Czech

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Abstract:The paper focuses on beer consumption in the Czech Republic, the country with the highest beer consumption per capita in the world. To understand the recent beer-consumption behaviour, we use the monthly data from a three year period, 2006-2008, to estimate both the 2SLS and the SUR model charting the demand for beer extended to the past consumption and advertising expenditure. The demand for beer in the Czech Republic reacts more strongly to the changes in price than it does to the investments in advertising. The results suggest two implications for the policy-makers. Consumption is as sensitive to the price of beer and its alternatives as it is to advertising, so taxes or restrictions on advertising can affect the consumption of beer, considering the long tradition of Czech consumers in drinking beer as the strong role of the past consumption demonstrates.

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“…As stated by Alston et al (2002), it is well known that the use of this method enables straightforward interpretation and is popular for demand studies focusing on a single commodity. According to Lee and Tremblay (1992) research, non-alcoholic beverages have increasingly been substituting alcoholic ones. Therefore we also use the price of mineral water in the model.…”

Section: Methodsmentioning

confidence: 99%

The demand for beer in Czech Republic: inderstanding longrun on- and off-trade price elasticities

Grosová¹,

Michal²,

Kutnohorská³

et al. 2017

Czech J. Food Sci.

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Grosová S., Masár M., Kutnohorská O., Kubeš V. (2017): Demand for beer in the Czech Republic: understanding long-term on-and off-trade price elasticities. Czech J. Food Sci., 35: 165-170.We provided estimates of price, cross-price, and income elasticities for on-and off-trade beer consumption using econometric models on time series data from 1994 to 2014. The empirical results indicate that the most important determinants of on-trade demand are the price of off-trade beer, the price of substitutes and past consumption, while the income elasticity was not found to be important. The most important determinants of off-trade beer demand were the price of on-trade beer and the price of substitutes. In the Czech Republic, there is a long tradition of beer consumption in pubs and restaurants. According to Vinopal (2007), beer drinking is often a social affair, so some prefer to drink beer in pubs compared to solitary household consumption of bottled beer. This shift in beer consumption from restaurants and pubs to retail or households could have a significant impact on traditional Czech pubs. In order to determine an optimal course of the reaction, it is necessary to find the causes of these phenomena. There are some reasons for this shift, one of them are changing relative prices. The real price per litre of on-trade beer has risen by 23% from 1994 to 2014; the real price of off-trade beer has fallen by 12% in the same time period. The fall of off-trade prices is largely caused by strong competition and heavy discounts of beer products in supermarkets. The other causes may stem from income changes and food-related life-style changes.

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Advertising and the US market demand for beer

Cited by 67 publications

References 35 publications

Demand for differentiated products: Price and advertising evidence from the U.S. beer market

Demand for differentiated products: Price and advertising evidence from the U.S. beer market

The demand for beer in presence of past consumption and advertising in the Czech Republic

The demand for beer in Czech Republic: inderstanding longrun on- and off-trade price elasticities

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