A SIMULTANEOUS-EQUATION ANALYSIS OF PRICING, CIRCULATION, AND ADVERTISING REVENUE FOR LEADING CONSUMER MAGAZINES

This study of leading U.S. consumer magazines presents a system of sim ultaneous equations regressions to model the complex relations among p rice, circulation, readership profile, and advertising revenues. It is claimed and then empirically demonstrated that changes in price and q uality of readership have concurrent and opposing effects on the circu lation and advertising revenues of leading consumer magazines. These a nalyses reexamine prior research that argued that the conventional wis dom that revenue from advertising subsidizes consumer prices is incorr ect.