Paul Deaver

Market Share Instability: and the Level of Demand in the Cigarette and Beer Industries Paul Deaver

This book analyzes demand and market share instability in both the cigarette and beer industries. The demand specifications focus on advertising expenditures, product price, income, and policy effects, while the market share instability specifications include advertising intensity, import intensity, two measures of market concentration, capital intensity, and the level of demand. U. S. data is used for the U. S. for the time period 1963-1996 for cigarettes, and 1953-2000 for beer. Although previous studies have focused on panel data sets for a large number of manufacturing industries when discussing market share instability, this thesis focuses on time series data for beer and cigarettes. Our demand results are consistent with the literature in that both beer and cigarettes are normal goods and have downward sloping demand curves. As for market share instability, an increase in the level of demand decreases market share instability for cigarettes, while the opposite holds true for beer.