Empirically distinguishing informative and prestige effects of advertising.(research information) From: RAND Journal of Economics | Date: June 22, 2001| Author: Ackerberg, Daniel A. | COPYRIGHT 2001 Rand, Journal of Economics. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group.Copyright information

This article introduces techniques to empirically distinguish different effects of brand advertising in nondurable, experience-goods markets. I argue that advertisements that give consumers product information should primarily affect consumers who have never tried the brand, whereas advertisements that create prestige or image effects should affect both inexperienced and experienced users. I apply this empirical argument to consumer-level data on purchases of a newly introduced bra...