RT Journal Article
SR Electronic
T1 How Do Taxes on Car Sales Affect Television Advertising Strategies?
JF Journal of Advertising Research
JO J Advert Res
FD WARC
SP 1
OP 16
DO 10.2501/JAR-2022-029
VO 63
IS 1
A1 Yiting Deng
A1 Min Jiang
A1 Xiaodong Jiang
YR 2023
UL http://www.journalofadvertisingresearch.com/content/63/1/1.abstract
AB Many countries have leveraged sales tax to discourage (or encourage) consumption of socially undesirable (or desirable) products. This article uses several exogenous vehicle sales tax change events to examine the effect of the low-emission vehicle sales tax rate on automobile brands’ television advertising strategies. Empirical results suggest that companies exhibit procyclical advertising behavior in response to the external tax rate change. Moreover, the sales tax rate affects advertisers’ selection of television networks and advertising slots. These results have important economic consequences for the media market, as well as managerial implications for marketers, broadcasters, and policymakers.