Measuring the Benefits to Advertising under Monopolistic Competition

This paper determines the benefits and costs of firm-level advertising in a monopolistically competitive industry. The model is useful in an environment in which firm-level costs may be absent or imprecise. The empirical example uses data on the advertising for a new line of prune snacks by Sunsweet Growers between 2008 and 2010, revealing average benefit-cost estimates from $1.26 to $4.35 for every dollar allocated to the new product line.
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Boland, Michael A.; Crespi, John M.; Silva, Jena; Xia, Tian, Measuring the Benefits to Advertising under Monopolistic Competition, Journal of Agricultural and Resource Economics, Volume 37, Issue 1, April 2012, Pages 144–155

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