Dispelling the myth: the effects of total advertising expenditure on aggregate consumption

Brian T Sturgess

This paper, originally published in 1982, investigates attempts to test the proposition that advertising is an important factor influencing total consumption.

Dispelling the myth: the effects of total advertising expenditure on aggregate consumption

Brian SturgessDepartment of Industrial Economics, University of Nottingham

Any attempt to measure the effect of aggregate advertising on consumer expenditure constitutes a test of the Galbraithian hypothesis that advertising and promotional activities by large capitalist corporations enable them to control demand. Additionally, if significant effects were found it might imply that aggregate advertising, although omitted by Keynes in his discussion of the factors determined in the propensity to consume, should be included in models of the consumption function for use by forecasters and public policy decision-makers. It...

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