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A STOCHASTIC MODEL OF SALES RESPONSE TO ADVERTISING
Author(s) -
Tapiero Charles S.
Publication year - 1977
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.1977.tb00571.x
Subject(s) - economics , stochastic modelling , advertising , econometrics , estimation , business , finance , management
A stochastic model of advertising response is developed. It is shown that the evolution of mean sales is equivalent to Vidale‐Wolfe type advertising models and to Stigler's diffusion model. A stochastic framework for advertising is found here to be ideally suited for the estimation of market parameters, for hypothesis testing of advertising models, and for studying the risk implications of an adversiting policy.