Social and Behavioral Sciences Commons^™

Measuring The Accountability Of Advertising Expenses In The Presence Of Sales Cost Inefficiency And Marketing Spillovers, Konstantinos Giannakas, Giannis Karagiannis, Vangelis Tzouvelekas

Department of Agricultural Economics: Presentations, Working Papers, and Gray Literature

This paper develops a tractable theoretical framework for analyzing the substitutability between different advertising media, the extent of marketing spillovers in the market, the allocative efficiency of advertising spending, and the sources of total advertising productivity and sales growth. Maintaining the separability assumption between sales and production technology, the proposed methodology relies on cost-function decomposition of total factor productivity and the duality between input distance and cost functions. Utilizing a flexible Translog advertising distance function, the methodology is applied to the advertising activity of meat processing firms in Greece during the period 1983-1997. Scale economies in advertising expenses turn out …