Consumer Reaction and the Effectiveness of Celebrity Endorsed Advertising: A Survey-Based Econometric Analysis

Abstract

In this study, we apply an econometric methodology to empirically examine the potential roles of a host of key factors on the part of the consumer in affecting the level of effectiveness (persuasiveness) of celebrity endorsement in advertising. Based on first-hand data obtained from surveys and using an econometric approach, we design and implement our empirical analysis. The analysis leads to estimation results showing that gender of the consumer matters critically in determining the level of effectiveness that persuasion of celebrity endorsed advertising could possibly reach. Through our regression exercise, we also find that the effectiveness of celebrity endorsed advertising crucially depends on the level of consumer income. In addition, our regression results also suggest that the socio-cultural background of the consumer plays a critical role in affecting the persuasiveness level of celebrity endorsed advertising.