The Effect of Advertising on Brand Awareness and Perceived Quality: An Empirical Investigation using Panel Data

We use a panel data set that combines annual brand-level advertising expenditures for over three hundred brands with measures of brand awareness and perceived quality from a large-scale consumer survey to study the effect of advertising. Advertising is modeled as a dynamic investment in a brand’s stocks of awareness and perceived quality and we ask how such an investment changes brand awareness and quality perceptions. Our panel data allow us to control for unobserved heterogeneity across brands and to identify the effect of advertising from the time-series variation within brands. They also allow us to account for the endogeneity of advertising through recently developed dynamic panel data estimation techniques. We find that advertising has consistently a significant positive effect on brand awareness but no significant effect on perceived quality

The Influence of Product Variety on Brand Perception and Choice

We propose that the variety a brand offers often serves as a quality cue and thus influences which brand consumers choose. Specifically, brands that offer a greater variety of options that appear compatible and require similar skills tend to be perceived as having greater category expertise or core competency in the category, which, in turn, enhances their perceived quality and purchase likelihood. Six studies support this proposition and demonstrate that compared to brands which offer fewer products, (a) brands which offer increased compatible variety are perceived as having higher quality; (b) this effect is mediated by product variety’s impact on perceived expertise; (c) the higher perceived quality produces a greater choice share of the higher variety brand, even among consumers who select options that multiple brands offer and (d) product variety also impacts post-experience perceptions of taste. The findings suggest that in addition to directly affecting brand choice share through influencing the fit with consumer preferences, product line length can also indirectly affect brand choice through influencing perceived brand quality

Heterogeneity and the dynamics of technology adoption

We estimate the demand for a videocalling technology in the presence of both network effects and heterogeneity. Using a unique dataset from a large multinational firm, we pose and estimate a fully dynamic model of technology adoption. We propose a novel identification strategy based on post-adoption technology usage to disentangle equilibrium beliefs concerning the evolution of the network from observed and unobserved heterogeneity in technology adoption costs and use benefits. We find that employees have significant heterogeneity in both adoption costs and network benefits, and have preferences for diverse networks. Using our estimates, we evaluate a number of counterfactual adoption policies, and find that a policy of strategically targeting the right subtype for initial adoption can lead to a faster-growing and larger network than a policy of uncoordinated or diffuse adoption

Measuring the bias of technological change

Abstract When technological change occurs, it can increase the productivity of capital, labor, and the other factors of production in equal terms or it can be biased towards a specific factor. Whether technological change favors some factors of production over others is an empirical question that is central to economics. The literatures in industrial organization, productivity, and economic growth rest on very specific assumptions about the bias of technological change. Yet, the evidence is sparse. In this paper we propose a general framework for estimating production functions that allows productivity to be multi-dimensional. Using firm-level panel data, we are able to directly assess the bias of technological change by measuring, at the level of the individual firm, how much of technological change is factor neutral and how much of it is labor augmenting. We further relate the speed and the direction of technological change to firms' R&D activities. * We than

Survey Measures Of Family Decision Processes For Econometric Analysis Of Schooling Decisions

In this article, we consider the collection of novel subjective data on family processes of schooling decisions. In particular, we review recent progress on survey measurement of expectations, information, and locus of decision of American families within the context of secondary schooling, and we discuss possible future developments by providing concrete examples from recent exploratory efforts. We argue that collection of data on adolescents’ and parents’ perceptions of the available school options and the application‐and‐admission rules, their subjective expectations about short‐ and long‐term consequences of alternative choices, and their assessments of the locus of decision making within families could greatly enhance economic modeling and contribute to effective econometric analysis of schooling decisions. (JEL C83, D19, D79, D83, D84, I21, I26, J24)Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/139961/1/ecin12322.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/139961/2/ecin12322_am.pd