Advertising's Elusive Economic Rationale: Public Policy and Taxation

Driver, Ciaran

Abstract

Advertising and its effects have been debated for well over a century. In the last fewdecades a generally sceptical view of the benefits of advertising has been overturned by a series ofacademic advances in economics that detail a variety of ways in which advertising may affect theeconomy and society. This academic work has however been paralleled by a growing popular andpolitical opposition to advertising and its social effects. In this paper, the positive economic case foradvertising is challenged by an assessment of the main channels of its influence and by a review ofthe associated empirical findings on its economic and wider impact. A policy response of limitingthe tax deductibility of business advertising is explored.

Citation

Driver, C. (2015). Advertising's Elusive Economic Rationale: Public Policy and Taxation. Journal of Economic Surveys, 31(1), 1-16. https://doi.org/10.1111/joes.12122

• Journal Article Type: Article
• Publication Date: Jul 27, 2015
• Deposit Date: Aug 12, 2015
• Publicly Available Date: Aug 30, 2018
• Journal: Journal of Economic Surveys
• Print ISSN: 0950-0804
• Electronic ISSN: 1467-6419
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 31
• Issue: 1
• Pages: 1-16
• DOI: https://doi.org/10.1111/joes.12122
• Keywords: Advertising; Economic Theory; Policy