The value of advertising in a magazine bundle

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Advances in Applied Microeconomics

ISSN: 0278-0984
Series editor(s): Professor Michael Baye, Professor John Maxwell

Subject Area: Economics

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Document Information:
Title:	The value of advertising in a magazine bundle
Author(s):	Craig A. Depken, Dennis P. Wilson
Volume:	10 Editor(s): Michael R. Baye, Jon P. Nelson ISBN: 978-0-76230-823-1 eISBN: 978-1-84950-124-8
Citation:	Craig A. Depken, Dennis P. Wilson (2001), The value of advertising in a magazine bundle, in Michael R. Baye, Jon P. Nelson (ed.) Advertising and Differentiated Products (Advances in Applied Microeconomics, Volume 10), Emerald Group Publishing Limited, pp.109-128
DOI:	10.1016/S0278-0984(01)10006-4 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Full length article
Abstract:	Existing analyses of circulation industries have often postulated that consumers consider advertising to be a “bad,” thereby requiring publishers to subsidize cover price (and thus circulation revenue) with advertising revenues. This paper uses data describing 117 U.S. magazines for the years 1996–1998 to determine the value of advertising in a magazine bundle. For four of five magazine genres, advertising is found to increase average newsstand circulation and newsstand price. These results indicate that advertising is a shift parameter in the newsstand demand for magazines, as opposed to the alternative hypothesis that advertising is a bad that subsidizes cover price.