A Longitudinal Model to Decompose the Effects of an Advertising Stimulus on Family Consumption

A general model describing individual consuming unit response to an advertising stimulus is developed. The measure of behavior utilized is consumption. In the model, the various effects of advertising on behavior are decomposed. These are price-advertising interactions, transitory or short-run effects, and permanent or long-term effects. Specific parameterized forms of the model demonstrate how alternative theories of the effects of advertising can be tested.