Printer Friendly
The Free Library
22,710,190 articles and books

Alcohol advertising in magazines: do beer, wine, and spirits ads target youth?

I. INTRODUCTION

In 2003, the alcohol beverage industry spent more than $1.6 billion on advertising in measured media outlets, including $394 million on ads placed in magazines. Industry critics allege To state, recite, assert, or charge the existence of particular facts in a Pleading or an indictment; to make an allegation.


allege v.
 that these activities intentionally in·ten·tion·al  
adj.
1. Done deliberately; intended: an intentional slight. See Synonyms at voluntary.

2. Having to do with intention.
 target adolescent audiences and thereby contribute importantly to social problems associated with underage alcohol consumption (Center on Alcohol Marketing and Youth The Center on Alcohol Marketing and Youth (CAMY) is a research and advocacy organization, based in Washington, DC, which monitors and reports on youth exposure to alcohol advertising.  [CAMY CAMY Center on Alcohol Marketing and Youth ] 2005b; Center for Science in the Public Interest 2002). The favored regulatory approach has been to advocate a placement standard based on the youth audience expressed as a proportion of the total audience. For example, the CAMY (2002, 2005a) claims that advertisements in media outlets that reach audiences with more than 15% underage youth result in "overexposure overexposure

too long an exposure time or too high a milliamperage causing too black a picture, loss of detail and some anomalies of translucency.
" to alcohol ads. Two reports by the Federal Trade Commission (FTC FTC

See Federal Trade Commission (FTC).
 1999, 2003) advocate a placement threshold of 25% as a best practice response by alcohol companies, and a report by the National Research Council's Institute of Medicine (NRC NRC
abbr.
1. National Research Council

2. Nuclear Regulatory Commission

Noun 1. NRC - an independent federal agency created in 1974 to license and regulate nuclear power plants
 2004, p. 138) argues that the industry should move toward a 15% threshold for television and 25% for other media. Other organizations, such as the American Medical Association (2004), support a total statutory ban of alcohol advertising except for ads placed inside of retail and wholesale outlets.

Following the FTC's 1999 report, the major companies in the alcohol industry collectively altered their self-regulatory advertising codes and media buying guidelines guidelines,
n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks.
: Beer Institute's Advertising and Marketing Code; Wine Institute's Code of Advertising Standards; and the Distilled Spirits Council of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.  (DISCUS), Code of Responsible Practices for Beverage Alcohol Advertising and Marketing. The Wine Institute amended its code in 2000 to adopt a 70% adult placement standard. In October 2003, the beer and spirits codes were amended to require that adults constitute at least 70% of the audience for TV, radio, and magazine advertisements, which represents an increase from the previous 50% adult standard (FTC 2003). Furthermore, the revised beer and spirits codes require that industry members conduct postplacement audits, including a third-party review system for controversial beer and spirits advertisements (DISCUS 2005).

Do alcohol advertisements target underage youth? The evidence on the affirmative AFFIRMATIVE. Averring a fact to be true; that which is opposed to negative. (q.v.)
     2. It is a general rule of evidence that the affirmative of the issue must be proved. Bull. N. P. 298 ; Peake, Ev. 2.
     3.
 side is based largely on a series of descriptive reports commissioned by an advocacy group, the CAMY (2002, 2005a). CAMY's studies measure the youth audience as a percent of the total audience for different alcohol brands and media outlets, which are aggregated to obtain measures of advertising exposure per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals.  for youth and adults. For magazines, CAMY's measures of gross rating points (GRPs) account for an advertisement's frequency and reach (audience composition), but fail to account for audience size. Because underage youth constitute about 15% of the total population, CAMY characterizes any audience containing more than 15% adolescents as youth-oriented. This designation is used regardless of other aspects of placement decisions, such as the number of adults in the audience or the number of adult readers per copy (FTC 2003, p. 32). Further, CAMY's studies are descriptive and based on the simplistic sim·plism  
n.
The tendency to oversimplify an issue or a problem by ignoring complexities or complications.



[French simplisme, from simple, simple, from Old French; see simple
 notion that targeting occurs whenever the 15% threshold is exceeded. Magazines such as Popular Mechanics and Sports Illustrated Sports Illustrated is the largest weekly American sports magazine owned by media conglomerate Time Warner. It has over 3 million subscribers and is read by 23 million adults each week, including over 18 million men, 19% of the adult males in the country.  with 17% and 25% youth readership, respectively, are characterized char·ac·ter·ize  
tr.v. character·ized, character·iz·ing, character·iz·es
1. To describe the qualities or peculiarities of: characterized the warden as ruthless.

2.
 as youth-oriented despite other features of the audience and magazine (CAMY 2002a). In addition to audience size, advertising content and costs are ignored by GRP-based measures.

Analytical evidence on youth exposure to alcohol advertisements in magazines is provided by two recent regression studies. Garfield et al. (2003) examined the occurrence (counts) of annual alcohol advertising placements for 35 major magazines that tracked youth readerships during 1997-2001. Ad counts that are 0 were apparently excluded. Using a Poisson model, they regressed the count of annual ads in each magazine on a set of demographic variables, including the number of youth readers (ages 12-19), number of young adults (ages 20-24), number of adults (ages 25+), number of male readers, number of black readers, number of low-income readers, and year dummy Sham; make-believe; pretended; imitation. Person who serves in place of another, or who serves until the proper person is named or available to take his place (e.g., dummy corporate directors; dummy owners of real estate).  variables. Because popular magazines tend to have a large number of readers in all categories, many of these variables are highly correlated cor·re·late  
v. cor·re·lat·ed, cor·re·lat·ing, cor·re·lates

v.tr.
1. To put or bring into causal, complementary, parallel, or reciprocal relation.

2.
. In addition, the explanatory ex·plan·a·to·ry  
adj.
Serving or intended to explain: an explanatory paragraph.



ex·plan
 variables were measured for 1999 only and did not contain any temporal variation. Consequently, the results for youth readers can only capture cross-sectional differences in the ad counts. Garfield et al. (2003, p. 2428) concluded that magazine ads for beer and spirits were associated positively with adolescent readership, and at a minimum, indirect targeting of youth was occurring. In a second study, Nelson (2005) used the cumulative data in Garfield et al. to examine cross-sectional features of their model, collinearity collinearity

very high correlation between variables.
 among the readership demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. , zero counts, and overdispersion of the Poisson residuals (excess zero counts). Using alternative estimation estimation

In mathematics, use of a function or formula to derive a solution or make a prediction. Unlike approximation, it has precise connotations. In statistics, for example, it connotes the careful selection and testing of a function called an estimator.
 methods and new variables for average age and income of adult readers, Nelson (2005) concluded that targeting of youth was not occurring for beer, wine, or distilled spirits.

The present study seeks to expand on the results in these two studies. First, the advertising count data cover a more recent time period of 2001-03, which includes the last year of beer and spirits advertising under the old 50% placement standard. Zero counts are included in the analysis. Second, the explanatory variables vary across magazines and over time and include the temporal variation that was missing in both previous studies. Third, the data set allows examination of explanatory variables that were ignored in previous studies, including measures of audience size, magazine sales outlets, and standardized costs of advertisements across magazines and time. In particular, the study demonstrates the importance of each magazine's real advertising cost per 1000 copies (CPM (1) (Critical Path Method) A project management planning and control technique implemented on computers. The critical path is the series of activities and tasks in the project that have no built-in slack time. ) in circulation as a variable affecting placements. This variable is the advertising industry's measure of magazine cost efficiency, and is available for standardized advertisements such as a full-page four-color ad (P4C P4C Philosophy for Children (educational movement)
P4C Page Four Color
). A cost variable (nonstandardized) was discarded dis·card  
v. dis·card·ed, dis·card·ing, dis·cards

v.tr.
1. To throw away; reject.

2.
a. To throw out (a playing card) from one's hand.

b.
 as insignificant by Garfield et al. and was unavailable in Nelson. The empirical results for price help clarify some of the earlier findings, such as placement of ads in magazines with predominantly pre·dom·i·nant  
adj.
1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant.

2.
 African American African American Multiculture A person having origins in any of the black racial groups of Africa. See Race.  readers (e.g., Ebony ebony, common name for members of the Ebenaceae, a family of trees and shrubs widely distributed in warmer climates and in the tropics. The principal genus, Diospyros, includes both ebony and persimmon trees. , Jet, and Vibe magazines). Fourth, following the emphasis in the regulatory literature, the article focuses on the percent of youth in the audience as an explanatory variable, which was largely ignored by previous studies in favor of the absolute number of youth. As pointed out by Nelson, popular magazines tend to have a large number of readers in all age groups, which leads to collinearity in readership numbers as well as difficulties in formulating regulatory standards (see NRC 2004, p. 139). Fifth, following Nelson (2005), both Poisson and negative binomial binomial (bī'nō`mēəl), polynomial expression (see polynomial) containing two terms, for example, x+y. The binomial theorem, or binomial formula, gives the expansion of the nth power of a binomial (x+  count models are estimated and compared.

The remainder of the article is divided into five sections. Section II describes the model and selected aspects of the data. Section III presents the econometric e·con·o·met·rics  
n. (used with a sing. verb)
Application of mathematical and statistical techniques to economics in the study of problems, the analysis of data, and the development and testing of theories and models.
 results for Poisson and negative binomial regressions for total ad counts, including specification tests for overdispersion. Section IV considers the marginal importance of the explanatory variables, including audience size and price elasticities Price elasticities

The percentage change in quantity divided by a percentage change in the price. Answers the question: How much will the demand for my product decrease if I raise prices by 10%?
. Section V examines beer and spirits ads separately, which increases the number of zero counts in the analysis. Section VI contains the conclusions and discusses the policy implications of the study.

II. MODEL AND DATA

Previous econometric studies of media placements analyzed an·a·lyze  
tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es
1. To examine methodically by separating into parts and studying their interrelations.

2. Chemistry To make a chemical analysis of.

3.
 advertising economies of scale at the brand or industry level (Bresnahan 1984; Seldon et al. 2000), intermedia Intermedia - A hypertext system developed by a research group at IRIS (Brown University).  choices at the brand and industry level (Fare et al. 2004; Seldon and Jung 1993; Silk et al. 2002), and the price of advertising (Depken 2004; Depken and Wilson 2001; Koschat and Putsis 2000, 2002). None of these studies estimated a demand function for media. The present study estimates a model of the demand for media space across magazines and time, conditional on reader demographics, magazine characteristics, and real price of a standardized advertisement.

Assume that advertisers' demand for media space is derived from consumers' demand for information about the existence and attributes of products and brands, including information that is persuasive in nature (Ehrlich and Fisher 1982). Assume also that the advertiser has solved the problem of media mix and must next decide on the choice of space in available magazines. Magazines can be described in terms of various characteristics of the readers (age, gender, race, income), characteristics of the magazine (subject matter, paid circulation, audience size, single-copy sales, number of issues), and the magazine's price for a standardized advertisement, for example, the cost of a P4C advertisement. Because advertising is provided jointly with the magazine's subject matter and magazines also contain numerous ads, there is considerable "clutter" or noise in the information process. A number of specialized services exist to collect, verify, and provide data about readers and magazines to both publishers and advertisers, which implies that the advertisers attempt to reduce the noise in the information process through placement or targeting decisions. Such data are typically proprietary but available to the public on a limited basis.

Specifying the demand function as a count model leads to the following equation for the expected number of occurrences (counts) of alcohol ads, [N.sub.it], placed in the ith magazine in year t:

(1) E([N.sub.it]) = exp exp
abbr.
1. exponent

2. exponential
([X'.sub.it][beta] + [Z'.sub.it][theta Theta

A measure of the rate of decline in the value of an option due to the passage of time. Theta can also be referred to as the time decay on the value of an option. If everything is held constant, then the option will lose value as time moves closer to the maturity of the option.
] + [alpha][P.sub.it] + [delta]ln(issue[s.sub.i])),

where X is a vector of reader demographics, Z is a vector of magazine characteristics, P is the real CPM for a P4C advertisement, and [beta], [theta] and a represent the coefficients. Holding incidence rates constant, weekly magazines have more annual alcohol advertisements than monthly magazines. Equation (1) treats the number of annual issues of each magazine as the "exposure" variable, which implies that the elasticity coefficient coefficient /co·ef·fi·cient/ (ko?ah-fish´int)
1. an expression of the change or effect produced by variation in certain factors, or of the ratio between two different quantities.

2.
 [delta] should be close to unity (Cameron and Trevedi 1998, p. 81). For count data, the Poisson model offers a number of advantages, but distribution plots suggested that the negative binomial might be more appropriate (Winkelmann 2003, p. 32). Following Nelson (2005), econometric results and tests are reported for both models. The price variable is identified by the existence of different real prices for a standardized advertisement, reflecting real changes over time for a given magazine and differences across magazines that reflect unobserved costs of supply that apply to all advertisers, including alcohol advertisers. Audience size is measured by readers per copy and is a measure of the marginal benefits of advertising that should be important for placement decisions. The main hypothesis in the article concerns the sign and significance of the variable for the percent of youth readers. The null hypothesis null hypothesis,
n theoretical assumption that a given therapy will have results not statistically different from another treatment.

null hypothesis,
n
 is that alcohol advertisers do not target youth, which means that the regression coefficient Regression coefficient

Term yielded by regression analysis that indicates the sensitivity of the dependent variable to a particular independent variable. See: Parameter.


regression coefficient 
 in (1) for youth readership should be insignificantly different from 0. According to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 Garfield et al. (2003, p. 2428), absent explicit evidence of intent, targeting occurs whenever a group is reached in a measurable or material manner. They argue that their significant results for a youth demographic variable demonstrate targeting of adolescent readers. The present article offers a test of the robustness of the conclusions in Garfield et al. The test also is consistent with U.S. Supreme Court interpretations of First Amendment protections provided to commercial speech under the so-called Central Hudson doctrine (Central Hudson Gas & Electric Corp. v. Public Service Commission of New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
, 447 U.S. 557 [1980]).. (1)

A. Variable Definitions and Data Sources

The sample consists of 28 major magazines for the time period 2001-03. Table 1 reports the data sources and definitions for the variables used in the regressions. Empirical results are reported in section III for four demographic variables (percent youth readers, adult median age, adult median real income, percent adult male readers) and five magazine characteristics (real CPM price, percent single-copy sales, adult readers per copy, square of readers per copy, annual issues). The annual number of issues for each magazine is a measure of exposure in the count model, that is, the expected ad count per year is the product of an incidence rate per issue and the level of exposure as measured by the annual number of issues. Because the number of alcohol ads can change for reasons external to the magazine market, some regressions also include year fixed-effects dummies. These variables control for changes in the prices of other media and changes in the total amount of alcohol advertising contained in other media. Due to possible discounting from published price lists, such as during the 2001 recession, the year dummies also permit a stronger test of the importance of price in placement decisions. According to the Statistical Abstract, total advertising revenues in magazines in 2003 were $18.3 billion, including $394 million in the alcohol category, or only 2.2% of the total. Hence, the explanatory variables, including the CPMs, should be exogenous Exogenous

Describes facts outside the control of the firm. Converse of endogenous.
 to advertising choices by alcohol producers, reflecting decisions made by all advertisers.

Table 2 summarizes selected aspects of the data set, including the cumulative numbers of ads for 2001-03; percent of youth in each magazine's audience in 2003; rate base circulation used in the CPMs; real CPM-P4C in dollars; and the audience size. The number of alcohol ads for each magazine was drawn from CAMY (2005a, p. 20), which covers annual count data on alcohol ads in 124 consumer magazines for the years 2001-03. The ad counts reflect advertising placements for all three alcohol beverages; that is, ads are combined for beer, wine, and distilled spirits. Reflecting constraints on broadcast advertising, CAMY's magazine counts are dominated by distilled spirits advertisements. For 2003, CAMY (2005a, p. 5) reported 495 magazine ads for beer, 417 ads for wine, and 2,330 spirits ads (72% of the total). In 2003, total spending on magazine ads was beer, $70.6 million; wine, $52.9 million; and spirits, $271.0 million (69%). For the period 2001-03, the 28 magazines in my sample contained a total of 3,675 alcohol ads, including 652 beer ads, 118 wine ads, and 2,905 distilled spirits ads (79%). Hence, the dispersion dispersion, in chemistry
dispersion, in chemistry, mixture in which fine particles of one substance are scattered throughout another substance. A dispersion is classed as a suspension, colloid, or solution.
 of ads by beverage is reasonably representative of industry practices. Many magazines have very few youth readers, and CAMY (2005a, p. 10) selectively examines data for 21 magazines with a "disproportionately dis·pro·por·tion·ate  
adj.
Out of proportion, as in size, shape, or amount.



dispro·por
" high youth readership, that is, the percent of adolescent readers exceeds 15%. For purposes of the present study, the online report MRI 1. (application) MRI - Magnetic Resonance Imaging.
2. MRI - Measurement Requirements and Interface.
+ Pocketpiece Magazine (Teen) tracks annual data on youth readerships for 28 magazines, including 14 of the magazines on CAMY's overexposed o·ver·ex·pose  
tr.v. o·ver·ex·posed, o·ver·ex·pos·ing, o·ver·ex·pos·es
1. To expose too long or too much: Don't overexpose the children to television.

2.
 list.2 MRI defines youthful readers as ages 12-19, who make up about 13.7% of the total population. As shown in Table 2, the youth audience in 2003 ranged from 4.7% for Better Homes and Gardens to 33.3% for The Source magazine. The 28 magazines in the sample are a small fraction of the total number of magazines. Although exact comparisons are difficult, if anything, the sample is biased toward a positive relationship for youth readers. All of the sampled magazines accept alcohol ads, which is not the case for some popular youth-oriented magazines; for example, Seventeen, Teen, and YM do not accept alcohol ads. Four magazines in the sample are among the most widely read magazines among adolescents (People Weekly, Rolling Stone rolling stone
Noun

a restless or wandering person
, Sports Illustrated, Vibe). The percent of youth readers equals or exceeds 20% for 14 of 28 magazines in the sample.

Standardized prices for advertisements are available publicly from the SRDS SRDS Symposium on Reliable Distributed Systems
SRDS Standard Rate and Data Service
SRDS Shop Repair Data Sheets
 Consumer Magazine Advertising Source. In Table 2, the CPMs range from $29.64 per thousand circulation for Jet magazine to $114.33 for Road & Track. The low prices for ads in black magazines explain some of the ad placements in this category. The last column in the Table 2 is the estimated number of adult readers per copy, which is an industry measure of audience size. This variable reflects the pass-along rate per copy, because it measures the number of adult readers compared to the paid circulation. Other things being equal, advertisers prefer magazines that reach a larger audience. For example, in 2003, Sports Illustrated had a paid circulation of 3.262 million and an estimated adult audience of 20.12 million. The average number of adult readers per copy is therefore 6.17. This size variable is calculated for each magazine for each year, and varies from 3.33 for Self magazine in 2001 to 15.8 for The Source in 2003. The square of readers per copy is used to capture nonlinearity in this variable.

B. Content Categories

Table 3 displays summary data on six magazine content categories: automobiles; black; men's style and sports; women's style; entertainment and music; and general and other magazines. In the next section, several model specifications are estimated that contain dummy variables for these content categories. This specification captures panel features of the data and allows additional tests of alcohol placement decisions that often are the subject of criticism, such as alcohol ads in conjunction with sports or automobiles. Using data for 2003, the automobile category has the highest average youth readership percentage, although the number of alcohol ads in this category is quite small. The entertainment and music category has the second highest youth percentage, the lowest mean adult age, and a large number of alcohol ads. This category also has a high pass-along rate as shown by the value of 8.8 for the mean number of adult readers per copy. Average adult reader income is lowest for black magazines and highest for the general and other category. In 2003, the average ad price was lowest for black magazines and highest for automobile magazines.

III. EMPIRICAL RESULTS

Table 4 displays the regression results for the Poisson and negative binomial models. The results for the Poisson model allow comparison with earlier studies by Garfield et al. (2003) and Nelson (2005). Three alternative specifications are estimated for each model. First, regressions (1), (4), and (5) omit o·mit  
tr.v. o·mit·ted, o·mit·ting, o·mits
1. To fail to include or mention; leave out: omit a word.

2.
a. To pass over; neglect.

b.
 the year dummies. These regressions include four demographics, three magazine characteristics, real price, and the log of the annual number of issues. Regression (5) constrains the exposure elasticity coefficient to a unitary unitary

pertaining to a single object or individual.
 value. Second, regressions (2) and (6) include the year dummies for 2002 and 2003. Third, regressions (3) and (7) report fixed-effects specifications for six magazine categories and three years. All of the reported standard errors are based on robust procedures in Stata 8.2. All the youth coefficients in Table 4 are insignificantly different from 0, regardless of the specification or model. Statistical tests reported indicate that the negative binomial is a better representation of the data, which confirms results reported in Nelson (2005).

A. Poisson Results

The Poisson results in regressions (1)-(3) fail to demonstrate that targeting of adolescents is taking place, although there is evidence that advertisers tend to favor young adult audiences. All of the youth coefficients are insignificantly different from 0, and have standard errors equal to or greater than the coefficient magnitudes. Among the demographic variables, alcohol placements are negatively associated with the median age of adult readers. Median adult income and percent adult male readers have positive coefficients, but neither variable is statistically significant. Among the magazine variables, positive effects are found for percent single-copy sales (newsstand sales) and adult readers per copy. In regression (2), the year dummies are not statistically significant. This result illustrates the weakness in the data and model used by Garfield et al. (2003). Regression (3) demonstrates that alcohol advertisers have the strongest preference for men's style and sports magazines, followed by entertainment and music magazines. In this specification, the exposure elasticity was small in magnitude and insignificantly different from 0. Consequently, the annual issues variable was omitted from regressions (3) and (7).

B. Negative Binomial Results

In Table 4, regressions (4)-(7) contain the results for the negative binomial count model. For count data, the negative binomial is the main alternative to the Poisson model. Count data may be better described by the negative binomial if there is occurrence dependence or unobserved heterogeneity het·er·o·ge·ne·i·ty
n.
The quality or state of being heterogeneous.



heterogeneity

the state of being heterogeneous.
 across magazines (Winkelmann 2003, p. 22). The negative binomial model also relaxes the presumed equality of the mean and variance functions that underlies the Poisson model. The negative binomial results again fail to demonstrate that targeting of adolescents is taking place as all of the youth coefficients are insignificantly different from 0. In other respects, the negative binomial results parallel the Poisson results, although the number of significant regressors increases. In particular, the real CPM price is statistically significant and negative. The exposure elasticities also are closer to unity. Comparing regressions (4) and (5), the results do not change much when the exposure elasticity is constrained con·strain  
tr.v. con·strained, con·strain·ing, con·strains
1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force.

2.
 to unity. Overall, the negative binomial results demonstrate the statistical importance of the real CPM price, adult median age, percent single-copy sales, adult readers per copy, square of readers per copy, and the exposure variable. The year dummies are insignificant in regression (6). The results for the fixed-effects specification are similar, except that the coefficient on the automobile category is significantly negative in regression (7).

The positive results for readers per copy is of special importance, since it illustrates a criticism by the FTC (2003, p. 32) of CAMY's methodology. Presumably pre·sum·a·ble  
adj.
That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster.
, advertisers are concerned about the composition and size of the audience. CAMY's methodology addresses only the composition of the audience and completely ignores its size. As pointed out by the FTC (2003, p. 33), the young adult population (ages 21-34) is about 50% larger than the underage youth population. Furthermore, alcohol consumption per capita by younger adults is greater than older adults, and brand loyalty increases with age. Hence, there are several business reasons for alcohol companies to advertise in magazines with large young adult audiences who have not yet formed strong brand preferences.

C. Specification Tests

A well-known feature of the Poisson model is the presumed equality of the conditional mean and variance functions (equidispersion). This restriction may not hold due to occurrence dependence, unobserved heterogeneity, or because the zero outcomes of the data-generating process are quantitatively different from the positive outcomes. Occurrence dependence or systematic contagion Contagion

The likelihood of significant economic changes in one country spreading to other countries. This can refer to either economic booms or economic crises.

Notes:
An infamous example is the "Asian Contagion" that occurred in 1997 and started in Thailand.
 can reflect past advertising successes or perhaps a tendency by advertisers to focus on a few magazines during a given time period due to so-called pulsing behavior (see Winkelmann 2003, pp. 16-22). Unobserved heterogeneity can arise if different models apply to different magazines due to random contagion, and this is reflected in a different proportion of zeros in the sample. For example, it is not clear if a zero placement occurs because advertisers did not happen to use a particular magazine during the study period or because that magazine would rarely be chosen for alcohol ads (e.g., zero counts for ads in Better Homes and Gardens). Using the results in Table 4, several specification tests were conducted. First, the Poisson model is nested within the negative binomial model (Winkelmann 2003, p. 100). Using comparable results in Table 4, a likelihood ratio (LR) test strongly rejects the Poisson model in favor of the negative binomial model. The LR test statistics are 923.0, 912.0, and 1031, respectively. The critical value of the chi-square distribution with one degree of freedom is 50.9 at the 99% confidence level. Second, the overdispersion parameters in the negative binomial regressions are significantly positive (see Cameron and Trevedi 1998, p. 79). Third, formal tests for overdispersion due to Cameron and Trevedi (1990) and Wooldridge (1996) rejected the null A character that is all 0 bits. Also written as "NUL," it is the first character in the ASCII and EBCDIC data codes. In hex, it displays and prints as 00; in decimal, it may appear as a single zero in a chart of codes, but displays and prints as a blank space.  for the three Poisson regressions. Overall, the results strongly favor the negative binomial model as the better representation of count data for alcohol advertisements in magazines. Combining the results in the present article with Nelson (2005), this result is robust for a variety of data and model specifications.

IV. INCIDENCE RATE RATIOS, MARGINAL EFFECTS, AND ELASTICITIES

To assess or gauge the importance of different explanatory variables for placement of alcohol ads in magazines, it is useful to report standardized coefficients. Various standardized coefficients exist for count models (see Cameron and Trivedi 1998, pp. 80-82; Winkelmann 2003, pp. 68-71). In the conditional expectation In probability theory, a conditional expectation (also known as conditional expected value or conditional mean) is the expected value of a real random variable with respect to a conditional probability distribution.  function given by equation (1), each regression coefficient is the (constant) proportionate pro·por·tion·ate  
adj.
Being in due proportion; proportional.

tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates
To make proportionate.
 change in the conditional mean due to a unit change in the explanatory variable. If the regressor is a dummy variable This article is not about "dummy variables" as that term is usually understood in mathematics. See free variables and bound variables.

In regression analysis, a dummy variable
, the coefficient gives the approximate relative impact. The incidence rate ratio (IRR IRR

In currencies, this is the abbreviation for the Iranian Rial.

Notes:
The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion.
) is given by exp(coefficient), and is a common way of comparing relative impacts in count models. The IRRs show the relative change in advertising counts for each unit change in an explanatory variable. Marginal effects depend on the observation size, but an average marginal effect is found by multiplying the regression coefficient by the mean of the dependent variable. Last, average elasticity values are computed by multiplying the coefficient estimate by the mean of the respective explanatory variable (Cameron and Trivedi 1998, p. 82).

For regression (4), Table 5 reports the incidence rate ratios, average marginal effects, and average elasticities. The standardized coefficients support the conclusion that the size of the adult audience is the most important variable for placement decisions. The audience IRR is 3.614 and the elasticity is 8.511. The price elasticity also is substantial, -1.955, and illustrates the importance of treating placement decisions as a demand function rather than just a marketing ploy ploy  
n.
An action calculated to frustrate an opponent or gain an advantage indirectly or deviously; a maneuver: "A typical ploy is to feign illness, procure medicine, then sell it on the black market" 
. Ranked by the average elasticities, the statistically important variables are adult readers per copy, adult median age, square of readers per copy, real CPM price, annual issues, and percent single-copy sales.

V. BEER AND SPIRITS ADVERTISING COUNTS

An extension of the analysis is an examination of advertising placements by beverage. The data by beverage are drawn from an online CAMY report. The author collected count data for beer and spirits ads for 2001-03 for the sample of 28 magazines. For wine, there are too few positive counts to warrant analysis (65 out of 84 possible observations are 0 or 77.4%). There are 38 zero counts for beer (45.2%) and 17 zero counts for spirits (20.2%). A larger proportion of zero counts suggests the analysis should consider more complicated empirical models. Given the findings in section III, results are reported for the negative binomial model and the zero-inflated negative binomial model. The latter model allows for separate treatment of zeros and strictly positive outcomes (Winkelmann 2003, p. 148).

Table 6 displays the results by beer and spirits. Adult median age is significantly negative in all of the regressions. Percent male readers is significantly positive in all six regressions, which is a change from Table 4. The CPM price of an advertisement is significantly negative for spirits but insignificant for beer ads. Possibly there are too few magazines in the sample with positive placements to capture this aspect of decision making by beer advertisers. Percent single-copy sales is significantly positive in the negative binomial model. Adult readers per copy is always significantly positive and the square of readers per copy is significantly negative. The log of the annual number of issues is significantly positive and close to unity in all regressions. The year dummies are not significant, which again illustrates the shortcomings of the model used by Garfield et al. (2003). The percent of youth readers is not significant in any of the regressions, regardless of the model or specification. The results fail to support the allegation The assertion, claim, declaration, or statement of a party to an action, setting out what he or she expects to prove.

If the allegations in a plaintiff's complaint are insufficient to establish that the person's legal rights have been violated, the defendant can make a
 that beer and spirits advertisers are targeting youth readers. Beer advertisers favor magazines with more young adults, male readers, and larger adult audiences, but not adolescents. Spirits producers favor magazines with more young adults, male readers, and larger adult audiences, but not adolescents. Spirits producers also favor magazines with lower costs per advertisement.

In a number of cases, the coefficients for beer and spirits are similar in magnitude, but the average marginal values depend on the mean of the respective dependent variable. For example, in the zero-inflated model, the beer and spirits coefficients are identical for adult median age and the average elasticities are -5.43 and -5.40, respectively, which suggests similar responses by beverage. However, the elasticities for adult readers per copy are 15.9 and 31.6 for beer and spirits, respectively. Hence, the results indicate that spirits producers advertise in magazines with a broader reach compared to beer producers. This outcome reflects the fact that magazines are the principal means of spirits advertising, given the long-standing voluntary ban of spirits ads on radio and television. Although this ban has been relaxed for cable TV, 70% of spirits ads in 2003 were in magazines compared to only 16% for broadcast media. (3) The comparable percentages for beer are 6.6% for magazines and 80% for television.

VI. CONCLUSIONS

Advertisements for alcohol beverages appear in a variety of magazines, including those with adolescent readers. The empirical results in this article illustrate some of the factors that affect advertising placement decisions for a sample of 28 major magazines, including the size of the adult audience and the price charged for an ad placement. The results for audience size capture criticisms by the FTC (2003, p. 33) of the methodology used by CAMY. The results for price are new economic evidence that was ignored by past researchers. Considerable controversy exists regarding the placement of alcohol ads in magazines where the youth proportion of the audience is greater than 15%. The exact basis for this regulatory standard is difficult to discern dis·cern  
v. dis·cerned, dis·cern·ing, dis·cerns

v.tr.
1. To perceive with the eyes or intellect; detect.

2. To recognize or comprehend mentally.

3.
, because several recent literature reviews fail to provide evidence that alcohol ads affect alcohol consumption in a material manner (Grube 2004; Nelson 2001, 2004; National Institute on Alcohol Abuse and Alchoholism 2000, p. 422; NRC 2004, p. 134). Using an improved data set and econometric methods, the results in the article fail to support claims that alcohol advertisers target underage youth. The empirical findings are contrary to the conclusions in Garfield et al. (2003) and also illustrate the shortcomings of the methodology used in a series of reports commissioned by the CAMY (2002, 2005a). Finally, policy makers in the alcohol area would be well advised to turn their attention to discussion of matters of importance for youthful drinking behaviors, rather than decisions made in the market for advertising space.

REFERENCES

American Medical Association. "AMA Policy Consideration: Labeling, Advertising, and Promotion of Alcoholic Beverages." Report of the Council on Scientific Affairs (A-04), AMA, Chicago, 2004; available online at www.alcoholpolicysolutions.net/policy_ama_alcohol.htm.

Bresnahan, T. F. "The Demand for Advertising by Medium: Implications for the Economies of Scale in Advertising," in Empirical Approaches to Consumer Protection Economics, edited by P. M. Ippolito and D. T. Scheffman (Washington, DC: Federal Trade Commission, 1984), pp. 135-63.

Cameron, A. C., and P. K. Trivedi. "Regression-Based Tests for Overdispersion in the Poisson Model." Journal of Econometrics econometrics, technique of economic analysis that expresses economic theory in terms of mathematical relationships and then tests it empirically through statistical research. , 46, 1990, 347-64.

______. Regression Analysis In statistics, a mathematical method of modeling the relationships among three or more variables. It is used to predict the value of one variable given the values of the others. For example, a model might estimate sales based on age and gender.  of Count Data (Cambridge: Cambridge University Press Cambridge University Press (known colloquially as CUP) is a publisher given a Royal Charter by Henry VIII in 1534, and one of the two privileged presses (the other being Oxford University Press). , 1998).

CAMY (Center on Alcohol Marketing and Youth). Overexposed: Youth a Target of Alcohol Advertising in Magazines (Washington, DC: CAMY, 2002); available online at camy.org/research/mag0902.

______. Youth Overexposed: Alcohol Advertising in Magazines, 2001 to 2003 (Washington, DC: CAMY, 2005a); available online at camy.org/research/mag0405.

______. Alcohol Marketing and Youth (Washington, DC: CAMY, 2005b); available online at camy.org/factsheets/index.php?FactsheetID=24.

CSPI CSPI Center for Science in the Public Interest
CSPI Corporate Service Price Index
CSPI Cumulative Schedule Performance Index
 (Center for Science in the Public Interest). "Alcohol Advertising: Are Our Kids Being Targeted?" CSPI, Washington, DC, 2001; available online at www.cspinet.org/booze/iss_youth.htm.

Depken, C. A. "Audience Characteristics and the Price of Advertising in a Circulation Industry: Evidence from US Magazines." Information Economics and Policy, 16, 2004, 179-96.

Depken, C. A., and D. P. Wilson. "The Value of Advertising in a Magazine Bundle," in Advances in Applied Micro-Economics: Advertising and Differentiated Products, edited by M. R. Baye and J. P. Nelson (Amsterdam: JAI JAI Java Advanced Imaging
JAI Justice et Affaires Interiéures (French: Justice and Home Affairs)
JAI Journal of ASTM International
JAI Just An Idea
JAI Jazz Alliance International
JAI Joint Africa Institute
 Press, 2001), vol. 10, pp. 109-28.

DISCUS (Distilled Spirits Council of the United States). Semi-Annual Code Report: Code of Responsible Practices for Beverage Alcohol Advertising and Marketing (Washington, DC: DISCUS, March 2005); available online at www.discus.org/pdf/SemiAnnualCode.pdf.

Ehrlich, I., and L. Fisher. "The Derived Demand Derived demand is a term in economics, where demand for one good or service occurs as a result of demand for another. This may occur as the former is a part of production of the second.  for Advertising: A Theoretical and Empirical Investigation." American Economic Review, 72, 1982, 366-88.

Fare, R., S. Grosskopf, B. J. Seldon, and V. J. Tremblay. "Advertising Efficiency and the Choice of Media Mix: A Case of Beer." International Journal of Industrial Organization, 22, 2004, 503-22.

FTC (Federal Trade Commission). Self-Regulation in the Alcohol Industry: A Review of Industry Efforts to Avoid Promoting Alcohol to Underage Consumers--A Report to Congress (Washington, DC: FTC, 1999); available online at www.ftc.gov/reports/alcohol/alcoholreport.htm.

______. Alcohol Marketing and Advertising--A Report to Congress (Washington, DC: FTC, 2003); available online at www.ftc.gov/os/2003/09/alcohol08report.pdf.

Garfield, C. F., P, J. Chung, and P. J. Rathouz. "Alcohol Advertising in Magazines and Adolescent Readership." Journal of the American Medical Association JAMA: The Journal of the American Medical Association is an international peer-reviewed general medical journal, published 48 times per year by the American Medical Association. JAMA is the most widely circulated medical journal in the world. , 289, May 14, 2003, 2424-29.

Grube, J. W. "Alcohol in the Media: Drinking Portrayals, Alcohol Advertising, and Alcohol Consumption among Youth," in National Research Council, Reducing Underage Drinking: A Collective Responsibility (Washington, DC: National Academies Press, 2004), pp. 597-624.

Koschat, M. A., and W. P. Putsis. "Who Wants You When You're Old and Poor? Exploring the Economics of Media Pricing." Journal of Media Economics, 13, 2004, 215-32.

______. "Audience Characteristics and Bundling: A Hedonic he·don·ic  
adj.
1. Of, relating to, or marked by pleasure.

2. Of or relating to hedonism or hedonists.



[Greek h
 Analysis of Magazine Advertising Rates." Journal of Marketing Research, 39, 2002, 262-73.

National Institute on Alcohol Abuse and Alcoholism alcoholism, disease characterized by impaired control over the consumption of alcoholic beverages. Alcoholism is a serious problem worldwide; in the United States the wide availability of alcoholic beverages makes alcohol the most accessible drug, and alcoholism is . "Alcohol Advertising: What Are the Effects?," in 10th Special Report to the U.S. Congress on Alcohol and Health (Washington, DC: NIAAA NIAAA National Institute on Alcohol Abuse and Alcoholism (National Institutes of Health)
NIAAA National Interscholastic Athletic Administrators Association
NIAAA Northwestern Illinois Area Agency on Aging
, 2000), pp. 412-26.

National Research Council, Institute of Medicine. Reducing Underage Drinking: A Collective Responsibility (Washington, DC: National Academies Press, 2004).

Nelson, J. P. "Alcohol Advertising and Advertising Bans: A Survey of Research Methods, Results, and Policy Implications," in Advances in Applied Micro-Economics: Advertising and Differentiated Products, edited by M. R. Baye and J. P. Nelson (Amsterdam: JAI Press, 2001), vol. 10, pp. 239-95.

______. "Advertising Bans in the United States," in EH.Net Encyclopedia encyclopedia, compendium of knowledge, either general (attempting to cover all fields) or specialized (aiming to be comprehensive in a particular field). Encyclopedias and Other Reference Books
, edited by R. Whaples (2004), pp. 1-29; online document available at www.eh.net/encyclopedia/contents/Nelson.AdBans.php.

______. "Advertising, Alcohol, and Youth." Regulation: The Cato Review of Business and Government, 28, 2005, 40-47.

Seldon, B. J., and C. Jung. "Derived Demand for Advertising Messages and Substitutability among the Media." Quarterly Review of Economics and Finance, 33, 1993, 71-86.

Seldon, B. J., R. T. Jewell, and D. M. O'Brien. "Media Substitutability and Economies of Scale in Advertising." International Journal of Industrial Organization, 18, 2000, 1153-80.

Silk, A. J., L. R. Klein, and E. R. Berndt. "Inter-Media Substitutability and Market Demand by National Advertisers." Review of Industrial Organization, 20, 2002, 323-48.

Winkelmann, R. Econometric Analysis of Count Data, 4th ed. (Berlin: Springer springer

a North American term commonly used to describe heifers close to term with their first calf.
, 2003).

Wooldridge, J. M. "Quasi-Likelihood Methods for Count Data," in Handbook of Applied Econometrics, edited by M. H. Pesaran and P. Schmidt (Oxford: Black-well, 1997), vol. 2, pp. 352-406.

JON P. NELSON*

*The author thanks Patrick Anderson Patrick Anderson may refer to:
  • Patrick Anderson (poet)
  • Patrick L. Anderson, businessman
  • Father Patrick Anderson, SJ
  • Major Patrick Anderson
, Kenneth Elzinga, Robert Feinberg, Everett Peterson, Robert Michaels, and three anonymous referees for helpful comments on earlier drafts. The usual caveats apply. The author has consulted with a law firm that represents companies in the alcohol industry. The topic and content of the article were prepared independently by the author, and the article was not reviewed by the law firm or other interested parties prior to submission for publication.

Nelson: Professor Emeritus e·mer·i·tus  
adj.
Retired but retaining an honorary title corresponding to that held immediately before retirement: a professor emeritus.

n. pl.
, Department of Economics, 608 Kern Kern, river, 155 mi (249 km) long, rising in the S Sierra Nevada Mts., E Calif., and flowing south, then southwest to a reservoir in the extreme southern part of the San Joaquin valley. The river has Isabella Dam as its chief facility.  Graduate Building, Pennsylvania State University Pennsylvania State University, main campus at University Park, State College; land-grant and state supported; coeducational; chartered 1855, opened 1859 as Farmers' High School. , University Park, PA 16803. Phone 1-814-865-0130, Fax 1-814-863-4775, E-mail jpn@psu.edu

ABBREVIATIONS

CAMY: Center on Alcohol Marketing and Youth

CPM: Cost per Thousand Circulation

DISCUS: Distilled Spirits Council of the United States

FTC: Federal Trade Commission

GRP GRP Group
GRP Group (file name extension)
GRP Glass Reinforced Plastic
GRP Gastrin-Releasing Peptide (biology)
GRP Gross Rating Point (advertising) 
: Gross Rating Points

IRR: Incidence Rate Ratio LR: Likelihood Ratio

NRC: National Research Council

P4C: Full-Page Four-Color Ad

1. See Nelson (2001, 2004) for discussion of alcohol advertising and the First Amendment. The third prong of the Central Hudson test requires that the government censor censor (sĕn`sər), title of two magistrates of ancient Rome (from c.443 B.C. to the time of Domitian). They took the census (by which they assessed taxation, voting, and military service) and supervised public behavior.  must demonstrate that an advertising ban or regulation will directly and materially advance a substantial government interest.

2. CAMY's list of 124 magazines includes many magazines that do not have large youth audiences, such as Bon Appetit, Forbes, and The New Yorker yorker
Noun

Cricket a ball bowled so as to pitch just under or just beyond the bat [probably after the Yorkshire County Cricket Club]
. Restricting the sample to magazines that allow alcohol ads and are read by adolescents would appear to bias the results toward rejecting the null. Tables 2 and 3 can be used to judge the dispersion of magazines by youth readership, circulation, and subject content.

3. In June 1996, now-defunct distiller Joseph E. Seagram aired TV advertisements for Crown Royal Canadian Whiskey whiskey [from the Gaelic for "water of life"], spirituous liquor distilled from a fermented mash of grains, usually rye, barley, oats, wheat, or corn. Inferior whiskeys are made from potatoes, beets, and other roots.  on an NBC-TV affiliate in Corpus Christi Corpus Christi, in Christianity
Corpus Christi [Lat.,=body of Christ], feast of the Western Church, observed on the Thursday after Trinity Sunday (or on the following Sunday).
, TX, thereby breaking the industry's long-standing voluntary ban of broadcast advertising. Reactions to the ads included a full-page protest in the August 2 edition of the New York Times and a "Just Say No" bill introduced in Congress by Rep. Joseph Kennedy (D-MA). President Bill Clinton asked the industry to go back to the ban, calling Seagram's TV ads "simply irresponsible ir·re·spon·si·ble  
adj.
1. Marked by a lack of responsibility: irresponsible accusations.

2. Lacking a sense of responsibility; unreliable or untrustworthy.

3.
." He also requested an investigation by the Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. . In late 2001, NBC-TV announced its intention to allow alcohol ads after 9 p.m. on programs such as Saturday Night Live This article is about the American television series. For the show related to Big Brother (UK), see Saturday Night Live (UK).

Saturday Night Live (SNL
, and the controversy shifted focus onto the network. NBC NBC
 in full National Broadcasting Co.

Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network.
 eventually reinstated its voluntary ban to realign itself with the other three major networks. Since that date, public health groups have continued to pressure the industry and the FTC to prevent spirits ads from appearing on network TV. As a consequence, distilled spirits advertising continues to be dominated by print advertisements.
TABLE 1 Variable Description and Data Sources

                     Definition, Units, and
Variable             Summary Statistics             Data Source

Ad Count             Number of alcohol ads for      CAMY 2005
                     2001, 2002, & 2003,            Magazine Study
                     including 11 zero
                     observations (13.1% of total
                     observations). Sample mean
                     (SD) = 43.8 (52.2); median =
                     16.0. Covers all three
                     beverages.
Beer Ad Count        Number of beer ads for 2001,   CAMY Web site,
                     2002, and 2003, including      interactive data
                     38 zero observations (45.2%    tool
                     of total observations).
                     Sample mean (SD) = 7.8
                     (12.7); median = 1.0. Beer
                     includes favored malt
                     beverages.
Spirits Ad Count     Number of spirits ads for      CAMY Web site,
                     2001, 2002, and 2003,          interactive data
                     including 11 zero              tool
                     observations (20.2% of total
                     observations). Sample mean
                     (SD) = 34.6 (41.0); median
                     = 14.0. Spirits include
                     liqueurs and cordials.
Percent Youth of     Teen audience (ages 12-19      MRI Magazine Report
Audience             yrs.) divided by total         (Teen)
                     audience (teens + adults).
                     Mean (SD) = 17.1% (5.5).
                     Range: 4.3 to 31.2%.
Adult Median Age     Median age of adult readers.   MRI Magazine Report
                     Mean (SD) = 34.8 yrs. (5.8).
                     Range: 23.2 to 46.4 yrs.
Adult Median Real    Median household income of     MRI Magazine Report
Income               adult readers. Expressed in
                     thousands of real dollars
                     using the CPI (2000 = 100).
                     Mean (SD) = $54.8 (8.9).
                     Range: $33.3 to $71.9.
Percent Adult Male   Adult male audience divided    MRI Magazine Report
Readers              by total adult audience
                     (adult men + adult women).
                     Mean (SD) = 49.8% (29.2).
                     Range: 6.3 to 91.9%.
Real CPM Price of a  Real CPM price of a P4C ad.    SRDS Magazine
P4C Ad               Magazine's cost for a P4C      Advertising Source
                     ad divided by its rate base
                     circulation (in thousands)
                     for each year. Expressed in
                     real dollars using the PPI
                     (2000 = 100). Mean (SD) =
                     $63.1 (18.5). Range: $26.1 to
                     $100.6 per P4C ad.
Percent Single-Copy  Percent of circulation         SRDS Magazine
Sales                accounted for by single-copy   Advertising Source
                     sales at newsstands. Mean
                     (SD) = 23.5% (19.3). Range:
                     2.6 to 80.1%.
Adult Readers per    Total adult audience divided   MRI Magazine Report
Copy                 by circulation. Square of
                     this variable is used to
                     pick-up other nonlinearity.
                     Mean (SD) = 6.62 (2.3).
                     Range: 11.1 to 248.7 readers
                     per copy.
Magazine Category    Five dummy variables for       Author constructed
                     magazines by category.
                     Omitted category is general
                     and other. See Table 3 for
                     categories.
Year Dummies         2002 dummy = 1 if year is      Author constructed
                     2002; 2003 dummy = 1 if year
                     is 2003.
Annual No. of        Log of annual no. of issues    MRI Circulation
Issues               for "exposure" differences     Report (no time
                     across magazines. Unlogged     variation)
                     mean (SD) = 21.3 (16.0).
                     Range: 12 to 53

Notes: All data for 2001-2003 from MRI Magazine Report, MRI Magazine
Report (Teen), and MRI Circulation Report accessed at
www.mriplus.com/cgi-bin/WebObjects/mriplus.woa. CAMY 2005b, p. 20; CAMY
Web site, interactive data tool for beverage data, "Magazine Alcohol
Ads: Your Child and You," at camy.org. Standard Rate and Data Service,
SRDS Consumer Magazine Advertising Source (Des Plaines, IL: SRDS), July
issue.

TABLE 2 Sample of Magazines and Selected Data for 2003

                                                        Rate Base
                              Alcohol Ads,  % Youth of  Circulation
Magazine (Circ. Rank)         2001-03       Audience    (000s)

Allure (88)                    23           30.5         900
Better Homes and Gardens (5)    3            4.7        7600
Car & Driver (61)              23           22.5        1350
Cosmopolitan (19)             261           19.1        2600
ESPN The Magazine (40)        341           29.2        1500
Ebony (37)                     84           18.6        1700
Entertainment Weekly (38)     332           16.7        1500
Fitness (58)                    3           20.5        1100
Glamour (29)                   39           18.1        2200
Hot Rod (na)                    2           26.4         700
In Style (42)                 291           18.9        1500
Jet (100)                     102           21.3         900
Maxim (25)                    453           15.0        2500
Motor Trend (67)                4           25.8        1250
Newsweek (17)                  23            8.6        3100
People (12)                    78           12.5        3250
Popular Mechanics (72)         47           16.3        1200
Popular Science (53)           30           19.9        1450
Road & Track (na)              12           21.4         750
Rolling Stone (66)            446           24.7        1250
Self (62)                      35           19.0        1200
Shape (45)                      5           15.8        1500
Spin (na)                     185           29.3         525
Sports Illustrated (16)       463           20.5        3150
The Source (na)                 7           33.3         475
Time (10)                      51            9.8        4000
Vibe (na)                     193           28.7         800
Vogue (75)                    139           18.1        1100

                              Ad Cost per         Adult Readers
Magazine (Circ. Rank)         Thous. Circulation  per Copy

Allure (88)                   $82.25               4.43
Better Homes and Gardens (5)   42.16               4.97
Car & Driver (61)             105.36               7.49
Cosmopolitan (19)              62.22               6.29
ESPN The Magazine (40)         90.00               6.21
Ebony (37)                     34.08               5.62
Entertainment Weekly (38)      68.71               5.26
Fitness (58)                   76.34               4.16
Glamour (29)                   55.35               5.67
Hot Rod (na)                  100.95               9.90
In Style (42)                  64.33               5.16
Jet (100)                      29.64               8.32
Maxim (25)                     66.80               5.46
Motor Trend (67)              101.71               5.27
Newsweek (17)                  61.77               6.08
People (12)                    52.62              10.16
Popular Mechanics (72)         78.22               7.90
Popular Science (53)           58.92               5.12
Road & Track (na)             114.33               7.27
Rolling Stone (66)             88.66               7.90
Self (62)                      73.15               3.78
Shape (45)                     60.45               3.54
Spin (na)                      94.17               4.77
Sports Illustrated (16)        71.75               6.17
The Source (na)                66.63              15.77
Time (10)                      53.00               5.25
Vibe (na)                      99.01               8.00
Vogue (75)                     81.02               8.75

Notes: See Table 1 for description of variables and data sources. Youth
ages 12-19 are 13.7% of the U.S. population ages 12 and older.
Circulation rank in 2003 is from MPA data on the top 100 magazines;
www.magazine.org/circulation.

TABLE 3 Magazine Categories and Average Data for 2003

                         Total Alcohol  Mean %       Mean Adult
Magazine Category        Ads, 2003      Youth, 2003  Age (yrs)

Automobiles                12           19.3         35.5
Black                     137           18.5         34.2
Men's style and sports    345           17.6         32.0
Women's style             186           15.6         33.5
Entertainment and music   270           18.6         30.9
General and other          74           13.5         39.8
All magazines            1024           16.5         35.3

                         Mean Adult     Mean Real      Mean Adult
Magazine Category        Income ($000)  P4C Price (a)  Readers per Copy

Automobiles              61.8           92.95          7.5
Black                    38.1           47.75          7.3
Men's style and sports   64.4           67.06          5.9
Women's style            63.3           57.86          6.5
Entertainment and music  54.8           65.28          8.8
General and other        66.0           57.34          5.0
All magazines            59.8           63.93          6.6

Automobiles: Car & Driver, Hot Rod, Motor Trend, Road & Track.
Black: Ebony, Jet, Vibe.
Men's Style & Sports: ESPN, Maxim, Sports Illustrated.
Women's Style: Cosmopolitan, Glamour, In Style, Vogue.
Entertainment & Music: Entertainment Weekly, People, Rolling Stone,
Spin, The Source.
General & Other: Allure, Better Homes & Gardens, Fitness, Newsweek,
Popular Mechanics, Popular Science, Self, Shape, Time.
(a) Price is measured in constant 2000 dollars for a P4C ad per 1000
circulation.

TABLE 4 Count Data Regressions for All Beverages

                               Poisson Model
Variable       (1)                (2)                (3)

Constant         -1.853 (2.28)      -1.711 (2.42)       2.368 (0.467)*
% Youth (ages     0.029 (0.027)      0.024 (0.032)     -0.008 (0.027)
  12-19)
Adult median     -0.184 (0.027)*    -0.185 (0.028)*  --
  age
Adult median      0.022 (0.016)      0.023 (0.017)   --
  real income
% Adult male      0.011 (0.008)      0.011 (0.008)   --
  readers
Real CPM         -0.015 (0.010)     -0.014 (0.010)   --
  price of
  P4C ad
% Single-copy     0.028 (0.013)*     0.027 (0.013)*  --
  sales
Adult readers     1.608 (0.290)*     1.634 (0.294)*  --
  per copy
Square of        -0.115 (0.017)*    -0.117 (0.017)*  --
  adult
  readers
  per copy
Year 2002      --                   -0.067 (0.115)     -0.162 (0.065)*
  dummy
Year 2003      --                   -0.149 (0.131)     -0.344 (0.087)*
  dummy
Auto category  --                 --                   -0.816 (0.501)
  dummy
Black          --                 --                    1.689 (0.363)*
  category
  dummy
Men's style    --                 --                    2.879 (0.270)*
  category
  dummy
Women's style  --                 --                    2.038 (0.375)*
  category
  dummy
Entertainment  --                 --                    2.198 (0.422)*
  and music
  category
  dummy
Log of annual     1.529 (0.417)*     1.503 (0.426)*  Not incl.
  no. of
  issues
Log            -818.8             -812.9             -863.2
  likelihood
Alpha          --                 --                 --
  dispersion
  parameter
  (SE)

               Negative Binomial Model
Variable       (4)                 (5)

Constant          0.701 (2.28)        1.172 (2.23)
% Youth (ages     0.052 (0.042)       0.052 (0.042)
  12-19)
Adult median     -0.166 (0.035)*     -0.176 (0.032)*
  age
Adult median      0.015 (0.027)       0.026 (0.022)
  real income
% Adult male      0.009 (0.008)       0.009 (0.007)
  readers
Real CPM         -0.031 (0.018)**    -0.036 (0.018)*
  price of
  P4C ad
% Single-copy     0.023 (0.014)**     0.017 (0.010)**
  sales
Adult readers     1.285 (0.366)*      1.348 (0.338)*
  per copy
Square of        -0.087 (0.017)*     -0.088 (0.016)*
  adult
  readers
  per copy
Year 2002      --                  --
  dummy
Year 2003      --                  --
  dummy
Auto category  --                  --
  dummy
Black          --                  --
  category
  dummy
Men's style    --                  --
  category
  dummy
Women's style  --                  --
  category
  dummy
Entertainment  --                  --
  and music
  category
  dummy
Log of annual     1.175 (0.326)*      1.000
  no. of
  issues
Log            -357.1              -357.2
  likelihood
Alpha             0.917 (0.263)*      0.921 (0.268)*
  dispersion
  parameter
  (SE)

               Negative Binomial Model
Variable       (6)                 (7)

Constant          0.607 (2.45)        2.184 (0.585)*
% Youth (ages     0.053 (0.043)       0.003 (0.030)
  12-19)
Adult median     -0.166 (0.036)*   --
  age
Adult median      0.015 (0.027)    --
  real income
% Adult male      0.009 (0.008)    --
  readers
Real CPM         -0.031 (0.018)**  --
  price of
  P4C ad
% Single-copy     0.023 (0.014)**  --
  sales
Adult readers     1.293 (0.363)*   --
  per copy
Square of        -0.087 (0.016)*   --
  adult
  readers
  per copy
Year 2002         0.023 (0.122)      -0.145 (0.103)
  dummy
Year 2003         0.059 (0.134)      -0.228 (0.103)*
  dummy
Auto category  --                    -0.914 (0.467)*
  dummy
Black          --                     1.621 (0.334)*
  category
  dummy
Men's style    --                     2.816 (0.241)*
  category
  dummy
Women's style  --                     1.983 (0.357)*
  category
  dummy
Entertainment  --                     2.108 (0.391)*
  and music
  category
  dummy
Log of annual     1.178 (0.333)*   Not incl.
  no. of
  issues
Log            -357.0              -347.9
  likelihood
Alpha             0.917 (0.262)*      0.700 (0.299)*
  dispersion
  parameter
  (SE)

Notes: Dependent variable is count of alcohol advertisements in each of
28 magazines for 2001, 2002, and 2003, including 11 zero observations.
Estimates obtained using Stata 8.2. Robust SEs in parentheses; one and
two asterisks indicate that the z-statistic is equal to or greater than
1.96 and 1.64, respectively.

TABLE 5 Incidence Rate Ratios, Marginal Effects, and Elasticities

                                      Ave.      Ave.
Variable                IRR (z-stat)  Marginal  Elasticity

% Youth readers         1.053 (1.24)   2.28      0.887
Adult median age        0.847 (4.77)  -7.27     -5.783
Adult median income     1.015 (0.53)   0.66      0.821
%Adult male readers     1.009 (1.21)   0.39      0.448
CPM-P4C price (real)    0.969 (1.70)  -1.36     -1.955
% Single-copy sales     1.024 (1.64)   1.01      0.538
Adult readers per copy  3.614 (3.51)  56.28      8.511
Sq. readers per copy    0.917 (5.24)  -3.81     -4.283
Annual no. of issues    --            --         1.175

TABLE 6 Count Data Regressions for Beer and Spirits

                                         Negative Binomial Model
Variable                          Beer                Beer

Constant                            -2.383 (3.20)       -3.458 (3.22)
% Youth (ages 12-19)                 0.028 (0.054)       0.054 (0.055)
Adult median age                    -0.274 (0.047)*     -0.268 (0.046)*
Adult median real income             0.029 (0.031)       0.033 (0.031)
% Adult male Readers                 0.021 (0.009)*      0.023 (0.008)*
Real CPM price of P4C ad            -0.011 (0.019)      -0.016 (0.018)
% Single-copy sales                  0.030 (0.017)**     0.031 (0.016)**
Adult readers per copy               1.517 (0.575)*      1.565 (0.564)*
Square of adult readers per copy    -0.118 (0.035)*     -0.121 (0.034)*
Year 2002 dummy                   --                     0.328 (0.357)
Year 2003 dummy                   --                     0.465 (0.366)
Log of annual no. of issues          1.859 (0.416)*      1.862 (0.413)*
Log likelihood                    -186.9              -186.1
Alpha dispersion parameter (SE)      1.017 (0.303)*      0.960 (0.296)*

                                         Negative Binomial Model
Variable                          Spirits            Spirits

Constant                            -0.266 (2.40)      -0.255 (2.49)
% Youth (ages 12-19)                 0.067 (0.043)      0.067 (0.044)
Adult median age                    -0.147 (0.038)*    -0.147 (0.038)*
Adult median real income             0.001 (0.028)      0.001 (0.028)
% Adult male Readers                 0.013 (0.006)*     0.013 (0.006)*
Real CPM price of P4C ad            -0.030 (0.015)*    -0.030 (0.016)**
% Single-copy sales                  0.033 (0.016)*     0.033 (0.016)*
Adult readers per copy               1.240 (0.292)*     1.239 (0.295)*
Square of adult readers per copy    -0.087 (0.015)*    -0.087 (0.015)*
Year 2002 dummy                   --                   -0.002 (0.296)
Year 2003 dummy                   --                   -0.007 (0.302)
Log of annual no. of issues          1.318 (0.314)*     1.318 (0.315)*
Log likelihood                    -337.9             -337.9
Alpha dispersion parameter (SE)      1.073 (0.198)*     1.073 (0.198)*

                                    Zero-Inflated Negative Binomial
Variable                          Beer               Spirits

Constant                            -6.387 (2.07)*      3.078 (1.72)
% Youth (ages 12-19)                -0.005 (0.028)      0.031 (0.029)
Adult median age                    -0.156 (0.026)*    -0.155 (0.027)*
Adult median real income             0.046 (0.017)*     0.009 (0.019)
% Adult male Readers                 0.015 (0.005)*     0.009 (0.004)*
Real CPM price of P4C ad             0.010 (0.012)     -0.029 (0.011)*
% Single-copy sales                  0.012 (0.010)      0.015 (0.010)
Adult readers per copy               2.051 (0.503)*     0.914 (0.223)*
Square of adult readers per copy    -0.149 (0.034)*    -0.062 (0.012)*
Year 2002 dummy                   --                 --
Year 2003 dummy                   --                 --
Log of annual no. of issues          1.024 (0.273)*     0.889 (0.217)*
Log likelihood                    -130.9             -288.3
Alpha dispersion parameter (SE)      0.135 (0.054)*     0.391 (0.073)*

Notes: Dependent variable is count of advertisements by beverage in each
of 28 magazines for 2001, 2002, and 2003. Estimates obtained using Stata
8.2. Robust SEs in parentheses; one and two asterisks indicate that the
z-statistic is equal to or greater than 1.96 and 1.64, respectively.
Zero counts are 38 for beer and 17 for spirits. Wine ads are excluded
due to the large number of zero counts. For specification of the
zero-inflated negative binomial model, see Winkelmann (2003).
COPYRIGHT 2006 Western Economic Association International
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006 Gale, Cengage Learning. All rights reserved.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Author:Nelson, Jon P.
Publication:Contemporary Economic Policy
Geographic Code:1USA
Date:Jul 1, 2006
Words:8631
Previous Article:Hungary's eurozone entry date: what do the markets think and what if they change their minds?
Next Article:Advertising restrictions and cigarette smoking: evidence from myopic and rational addiction models.
Topics:

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters