6533b7defe1ef96bd127661c
RESEARCH PRODUCT
A Cointegration Analysis of Car Advertising and Sales Data in the Presence of Structural Change
Vicente EsteveFrancisco Requenasubject
Economics and EconometricsStructural changeMarket segmentationCointegrationOrder (exchange)media_common.quotation_subjectStructural breakEconomicsBusiness Management and Accounting (miscellaneous)Stable equilibriumAdvertisingRecessionmedia_commondescription
Abstract This paper examines whether there is a long‐run stable equilibrium relationship between advertising and sales across the market segments of the UK car industry over the period 1971–2001. In order to achieve this goal, we allow for structural breaks in the series using cointegration techniques. The results show the existence of long‐run equilibrium relationships in all six market segments, although in four of them the relationship is not stable. In general, one structural change is detected in the late 1970s and another in the early 1990s, coinciding with two economic recessions. When we do not account for structural changes, the estimated long‐run elasticities of advertising on sales are seen to be substantially downwardly biased. Finally, a noticeable increase is observed in long‐run elasticities in most car market segments during the nineties with respect to previous decades.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2006-02-01 | International Journal of the Economics of Business |