Advertisement Spending and Income: An Aggregative Analysis | Zendy

Baiding Hu | Zendy; Amal Sanyal | Zendy

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Advertisement Spending and Income: An Aggregative Analysis

Author(s) -

Baiding Hu,

Amal Sanyal

Publication year - 2016

Publication title -

theoretical economics letters

Language(s) - English

Resource type - Journals

eISSN - 2162-2078

pISSN - 2162-2086

DOI - 10.4236/tel.2016.62040

Subject(s) - cointegration , economics , granger causality , econometrics , real gross domestic product , monetary economics , causality (physics) , quantum mechanics , physics

Existing studies tend to investigate cross-sectional relations between GDP and advertisement at the firm or industry level. The present study focuses on the long-run relation between GDP and aggregate advertisement spending using United States data for the period 1900-2007. Granger causality tests indicate the temporal precedence of GDP. A cointegration analysis shows that, as GDP increases, it causes advertisement spending to increase at a rate faster than its own growth. Faster growth relative to GDP is accompanied with a negative autonomous trend of advertisement spending. This trend appears consistent with the continuous technical progress in advertisement

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