Skip to main content

Measuring and testing advertising-induced rotation in the demand curve

Buy Article:

$51.63 plus tax (Refund Policy)


Advertising can rotate the demand curve if it changes the dispersion of consumers' valuations. We provide an elasticity form measure of the advertising-induced demand curve rotation in five demand models and test for its presence in the US nonalcoholic beverage market. The Almost Ideal Demand System (AIDS) model reveals that doubling advertising spending rotates the demand curves clockwise for milk, and coffee and tea with associated slope changes of 7 and 12%. Soft-drink advertising rotates its demand curve counterclockwise. Our policy suggestion is that milk and soft-drink firms time advertising to coincide with high-and low-price periods, respectively.

Document Type: Research Article


Affiliations: 1: Applied Economics and Management, Cornell University, 311 Warren Hall, Ithaca, 14853, USA 2: Agricultural Economics, Auburn University, Auburn, USA 3: Cornell University, Ithaca, USA

Publication date: May 1, 2010

More about this publication?

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more