Using panel data to determine the effect of advertising on brand-level distilled spirits sales.

OBJECTIVE: The purpose of the present study is to determine the effect that brand-level advertising has on brand-level spirits demand. METHODS: Using a panel data set consisting of 16 brands and 14 years of data, a fixed effects model of brand-level spirits demand was estimated. RESULTS: It was found that own-brand advertising, income, rival-brand price, a time trend and brand loyalty all have a significant effect on brand-level spirits demand. CONCLUSIONS: These results indicate that brand-level spirits advertising results only in brand switching and does not increase the overall size of the market.