"Communism doesn't work because people like to own stuff." - Frank Zappa

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Alcohol Advertising

"Advertising increases alcohol consumption, which increases alcohol abuse....right? WRONG. There is no solid evidence from either scientific research or practical experience that this theory of advertising is correct.

A study by the Federal Trade Commission found that there is "no reliable basis to conclude that alcohol advertising significantly affects consumption, let alone abuse...

The definitive review of research from around the world found that advertising has virtually no influence on consumption and has no impact whatsoever on either experimentation with alcohol or its abuse. This is consistent with other reviews of the research...

If advertising doesn't increase consumption, why bother to advertise? The answer is simple: to increase market share...

A widely reported "fact" is that by the age of 18, the typical young person will have seen 100,000 beer commercials. However, to see that many such commercials, it appears that a person would have to view television for about 161,290 hours or 18.4 years. Thus, a person would have to begin watching TV 24 hours a day, each and every day, from birth until after age 18.

In reality, viewers are much more likely to see alcohol portrayed during TV programs than during commercials. For example, an analysis of prime time TV found that alcohol commercials appeared at the rate of 0.2 per hour while drinking portrayals during programs occured 25 times more frequently, at five times per hour.

Perhaps those who want to reduce the presence of alcohol on television should propose eliminating the programming and let children watch commercials instead...

One of the main arguments against alcohol beverage ads on television is that they "normalize" drinking in the minds of young viewers. To the extent that this is true, the ads may be performing a positive role.

The commonplace nature of alcohol ads on TV serves not to glamorize the products, as some critics suggest, but to cast them as mundane consumer products, right alongside aspirin, cookies, and alkaline batteries. That's a constructive way for young people to view them.

On the other hand, if we treat beverage alcohol as a dangerous substance to be avoided and not even advertised, we inadvertently raise it up from the ordinary into the realm of the powerful, the tantalizing, and the desirable Big Deal. In so doing, we slip into the familiar, failed pattern of demonizing the substance of alcohol rather than discouraging irresponsible behavior...

In spite of all the colorful rhetoric and emotional anecdotes, alcohol commercials do not cause young people to drink. The greatest influence of their beliefs, attitudes and behaviors are from their parents."

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The macroeconomic relationship between advertising and consumption

"Profit-maximizing firms advertise in order to increase the demand for the goods they produce. Hence, we would expect increases in a firm's advertising to be associated with increases in consumption of the firm's goods, ceteris paribus. The increased demand for the firm's goods may be associated with decreased demand of their rivals' goods. At the market level, increases in advertising by the industry may not be accompanied by increased consumption of the industry's output. This is because changes in the levels of advertising among firms in a particular industry could merely rearrange market shares. If this is true then, in that industry, a firm which increases its advertising relative to its rivals will gain sales at the rivals' expense; advertising in this case is a zero-sum game.

When we aggregate across markets to consider advertising at the national level, the question of the effect of advertising upon consumption has still different implications. If increased advertising levels for the economy are associated with increased consumption, this suggests that consumers are increasing current consumption at the expense of future consumption (i.e., savings). If this is true, then advertising affects aggregate consumption and the business cycle...

Most previous empirical studies of the causal relationship between aggregate advertising and aggregate consumption reject the hypothesis that advertising affects consumption... The results of Ashley, Granger, and Schmalensee suggest that consumption might affect advertising but that aggregate advertising does not seem to affect aggregate consumption"

This study found a causal relationship, but I hate matrices so I zoned out.