SOME EMPIRICAL METHODS OF ESTIMATING ADVERTISING EFFECTS IN DEMAND SYSTEMS: AN APPLICATION TO DRIED FRUITS

Abstract

Two different methods of incorporating advertising effects into Almost Ideal Demand Systems (AIDS) are presented. Both advertising schemes are designed to allow theoretical restrictions to hold globally rather than at particular sample points. The models are estimated for California figs, prunes, and raisins. Empirical results indicate that generic advertising effects for these three dried fruits are generally weak when compared to price and total expenditure effects. Estimated cross-commodity effects also are relatively small except for the negative effect of raisin advertising on the quantity of prunes demanded.