Full Citation

Title: Not All Eyeballs Are Created Equal: A Structural Equilibrium Model of Television Advertisers, Networks, and Viewers

Citation Type: Dissertation/Thesis

Publication Year: 2005

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Abstract: Broadcast media deliver audiences to advertisers by bundling nominally free programming with advertisements. These industries are occasionally affected by technology that changes media consumers' control over their advertising exposure. The effects of such technological change depend on media consumers' and advertisers' demand elasticities. This dissertation introduces a method to predict the equilibrium effects of the diffusion of advertisement-avoidance technology, and uses data from the US television industry to illustrate the method.I use a random-coefficients logit to model television viewers. Viewers' television utilities depend on program characteristics and advertising quantities. Advertiser demand for television audiences depends on audience size, viewer demographics, and program characteristics. Television networks compete in advertising quantities for viewers, and generate revenues through ad sales.The model is estimated using television audience data for fifty geographic television markets, program characteristics (including genre and cast demographics), viewer demographics, and quantities and prices of national advertisements. The demand estimation yields the first finding that television viewers, on average, dislike viewing commercials.I respecify and solve the empirical model to account for the assumed effects of an advertisement-avoidance technology on viewers' behavior and advertisers' demand. The solution of the respecified model indicates that proliferation of the assumed technology has a small, positive effect on advertising quantities.

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Authors: Wilbur, Kenneth C.

Institution: University of Virginia

Department: Department of Economics

Advisor: Simon Anderson

Degree: Doctor in Philosophy

Publisher Location: Charlottesville, VA

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Data Collections: IPUMS USA

Topics: Other

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