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Using Panel Data to Determine the Effect of Advertising on Brand-Level Distilled Spirits Sales

Mark Paul Gius

Objective: The purpose of the present study is to determine the effect that brand-level advertising has on brand-level spirits demand. Method: Using a panel data set consisting of 16 brands and 14 years of data, a fixed effects model of brand-level spirits demand was estimated. Results: It was found that own-brand advertising, income, rival-brand price, a time trend and brand loyalty all have a significant effect on brand-level spirits demand. Conclusions: These results indicate that brand-level spirits advertising results only in brand switching and does not increase the overall size of the market. (J. Stud. Alcohol 57: 73-76, 1996)