Revisiting the Principle of Relative Constancy

Abstract

This study extends prior consumer mass media expenditures research by proposing two new econometric models for testing the principle of relative constancy (PRC). The PRC posits that the proportion of income devoted to the mass media will not change significantly over time, although some variations among mass media categories may occur to enable new communication technologies to succeed in the marketplace. Regression and cointegration analyses were conducted with Belgian mass media expenditure data from 1953 to 1991. Results revealed that the PRC failed to be supported for both models. Because of the PRC's lack of economic foundation and ambiguous empirical evidence, the authors suggest a shift in emphasis from PRC research to development of alternative mass media expenditure models.