Assessing the effect of advertising expenditures upon sales: A Bayesian structural time series model

  title={Assessing the effect of advertising expenditures upon sales: A Bayesian structural time series model},
  author={V 'ictor Gallego and Pablo Angulo and Pablo Su'arez-Garc'ia and David G'omez-Ullate},
  journal={Applied Stochastic Models in Business and Industry},
We propose a robust implementation of the Nerlove--Arrow model using a Bayesian structural time series model to explain the relationship between advertising expenditures of a country-wide fast-food franchise network with its weekly sales. Thanks to the flexibility and modularity of the model, it is well suited to generalization to other markets or situations. Its Bayesian nature facilitates incorporating \emph{a priori} information (the manager's views), which can be updated with relevant data… 
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