Demand and advertisement
Many economic debates, including the recent inflation ones, often get framed as demand / supply problems. Demand is often linked with money saved, changing needs, or changing benefits of something (e.g. tax concessions making investment properties more interesting). However, the advertisement industry's whole purpose is to manipulate demand, which I have never seen mentioned in debates. I realised it seems odd that all kind of things get mentioned in the inflation debate, in the mainstream you hear interest rates, welfare system payment, government spending, and if you look a bit wider, you see increased taxes and price controls, these things seem way more indirect and disruptive than restrictions or disincentives on advertisements. Yet, I have never heard anyone mention that as an option.
Now, I can imagine reasons why it might not be an effective or feasible leverage point, but I found it odd that I had never heard about it. Are there any studies/arguments on the relation between advertisement and demand on a societal level?
Even more interesting, are there any studies on productive capacities and advertisement practices/limitations/disincentives? Arguably advertisement corrupts the idealised supply/demand mechanic that should lead open markets to produce what people want and increasing the standard of living.
Posted May 11, 2023, 4:00 AM UTC