Abstract
This study examines the relationship between advertising and the quality of three relatively routine legal services. The nature of the services examined made it possible to use attorney time input data to measure output quality. The study's data were collected via attorney surveys conducted in seventeen metropolitan areas across the U.S. The study's findings suggest that advertising and average output quality are inversely related in routine legal service markets. The policy implications of such findings depend critically on the level of offered quality prior to the advent of advertising. If one assumes that attorneys offered inefficiently high levels of service quality to justify their non-competitive prices, then this study's findings suggest that advertising serves to move the average level of quality in the direction of greater efficiency.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Benham, Lee. “The Effect of Advertising on the Price of Eyeglasses,”Journal of Law and Economics 15 (October 1972), pp. 337–51.
Bond, Ronald S., John E. Kwoka, Jr., John J. Phelan, and Ira Taylor Whitten.Effects of Restrictions on Advertising and Commercial Practice in the Professions: The Case of Optometry, Federal Trade Commission Staff Report, September 1980.
Breusch, T. S. and A. R. Pagan. “A Simple Test for Heteroscedasticity and Random Coefficient Variation,”Econometrica 47 (September 1979) pp. 1287–1294.
Cady, John F. “An Estimate of the Price Effects of Restrictions on Drug Price Advertising,”Economic Inquiry 14 (December 1976). pp. 493–510.
Cox, S. R., Allan C. DeSerpa, and William C. Canby, Jr. “Consumer Information and the Pricing of Legal Services,”The Journal of Industrial Economics 30 (March 1982), pp. 305–18.
Jacobs, William W., Brenda W. Doubrava, Robert P. Weaver, Douglas O. Stewart, Eric L. Prahl, William R. Porter, Nathaniel Greenspun, and R. Dennis Murphy.Improving Consumer Access to Legal Services: The Case for Removing Restrictions on Truthful Advertising, Federal Trade Commission Staff Report, November 1984.
Kwoka, John E., Jr. “Advertising and the Price and Quality of Optometric Services,”American Economic Review 74 (March 1984), pp. 311–16.
Nelson, Phillip. “Advertising as Information,”Journal of Political Economy 81 (July/August 1974), pp. 729–54.
Schmalensee, Richard. “A Model of Advertising and Product Quality,”Journal of Political Economy 86 (June 1978), pp. 485–503.
Schroeter, J.R., S.L. Smith, and S.R. Cox. “Attorney Advertising and Competition in Routine Legal Service Markets,” Arizona State University Working Paper, (1985).
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Cox, S.R., Schroeter, J.R. & Smith, S.L. Attorney advertising and the quality of routine legal services. Rev Ind Organ 2, 340–354 (1985). https://doi.org/10.1007/BF02418921
Issue Date:
DOI: https://doi.org/10.1007/BF02418921