Relative Constancy of Advertising Spending

Abstract

This study empirically examines the principle of relative constancy (PRC) across more than 70 nations over time (1991-2001). Focusing on the relationship between advertising spending and national economy as reflected by GDP, the authors found that while GDP is the most obvious explanatory variable for advertising spending, the relationship is not proportionate and there is the potential that other variables also affect a country’s advertising expenditures. The degree of applicability of the PRC might be different depending on the types of media and the characteristics of the nations as the notion of the PRC seems to be more apparent in developed nations.

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