Abstract
The Koyck scheme has been a popular assumption in the dynamic modeling of sales response to advertising. This paper proposes an autocorrelation test to assess whether or not available sales series arise from a Koyck-type distributed lag scheme. The test is based on the peculiar nature of the autocovariances of sales series under the Koyck assumption. Since the peculiar property is insensitive to the level of aggregation of the sales series and exists even when the bivariate sales-advertising relationship is embedded in a more general model containing other sales predictors, the testing procedure is readily applicable to any finite sales series.
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Vanhonacker, W.R. Testing the Koyck scheme of sales response to advertising: An aggregation-independent autocorrelation test. Market Lett 2, 379–392 (1991). https://doi.org/10.1007/BF00664224
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DOI: https://doi.org/10.1007/BF00664224