How Advertising Helps Luxury Companies Charge an Expansive Price: Relationship between Advertising and Price

DOI

10.2991/aebmr.k.220405.172How to use a DOI?

Keywords

luxury companies; OLS regression model; styling; advertising

Abstract

This paper analyzes the influence of advertising on price and how advertising helps luxury companies create an expensive price in the market. We first use the profit-maximization model and cost-minimization model to calculate the equilibrium advertising expense and the increased amount of profit after adding advertising as a new variable. We then use the OLS regression model and panel data regression model to test the relationship between advertising expense and total revenue. Finally, the result of the empirical models strongly supports our hypothesis that an increase in advertising expense will lead to an increase in total revenue.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Tieyun Wang
PY  - 2022
DA  - 2022/04/29
TI  - How Advertising Helps Luxury Companies Charge an Expansive Price: Relationship between Advertising and Price
BT  - Proceedings of the 2022 7th International Conference on Social Sciences and Economic Development (ICSSED 2022)
PB  - Atlantis Press
SP  - 1025
EP  - 1032
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220405.172
DO  - 10.2991/aebmr.k.220405.172
ID  - Wang2022
ER  -