Advertising restrictions, competition, and alcohol consumption

Distilled spirits producers recently voted to eliminate their voluntary, ba n on broadcast advertising. The ban received public support because of the high social cost associated with alcohol consumption and the belief that ad vertising promotes alcohol consumption and abuse. In spite of this belief t he empirical evidence indicates that advertising has no significant effect on the market demand for distilled spirits. This evidence has led many poli cy economists to conclude that eliminating the ban will have no effect on a lcohol consumption. The purpose of this research is to show that this concl usion is incorrect because it ignores the fact that advertising restriction s may affect industry competition as well as market demand.