Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279470 
Year of Publication: 
2023
Series/Report no.: 
Working Paper No. 2023-15
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
The last decades have seen large improvements in digital advertising technology that allowed firms to better target specific consumer tastes. This research studies the relationship among digital advertising, the rise of varieties, and economic welfare. We develop a model of advertising and varieties where firms choose the intensity of digital ads directed at specific consumers as well as traditional ads that are undirected. The calibrated model shows that improvements in digital advertising have driven the rise in varieties over time. Empirical evidence is presented using detailed micro data on firms' products and advertising choices for the 1995-2015 period. Causal analysis using exogenous variation in consumers' differential access to the internet supports the suggested mechanism.
Subjects: 
digital (directed) advertising
traditional (undirected) advertising
specialization
targeting
internet
varieties
welfare
JEL: 
E13
L15
I31
M37
O14
O31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.