TITLE:
The Impact of Advertising on Consumption: Industry-Level Evidence from European Panel Data
AUTHORS:
Marco Gambaro, Tong Wang, Yingchao Zhang
KEYWORDS:
Consumption, Advertising, Panel Data, Media
JOURNAL NAME:
Theoretical Economics Letters,
Vol.16 No.2,
April
24,
2026
ABSTRACT: This paper investigates the relationship between advertising and consumption with panel data at the industry level for some European countries. At the macroeconomic level, consumption can increase only if saving decreases. However, the competition effect of advertising is better captured at the industry level, which allows for interaction between firms. We explore possible relationships with a unique dataset of consumption and advertising spending in 27 sectors across 9 years for 5 European Union countries. Our results show that consumption has a significant influence on advertising, but the reverse does not apply. Our findings also suggest that business stealing is the dominant effect of advertising relative to consumption increasing.