Search And Experience Goods: Evidence From The 1960's And 70's

Abstract

This paper examines two aspects of search and experience goods: 1) the differences between the levels of retail and national-brand advertising that would be expected for search goods versus experience goods; and 2) differences in advertising intensity between these two types of goods. The ratio of retail to national-brand advertising was found to be greater for search goods than for experience goods. In addition, the ratio of national-brand advertising in newspapers to sales was found to be greater for experience goods than for search goods. The results overall provide considerable support for Nelson's (1970, 1974) work.