ON CONSUMER- VERSUS FIRM-LEVEL ANALYSIS OF ADVERTISING EFFECTIVENESS: IMPLICATIONS FOR MODEL BUILDING*

Issues relating to the construction of marketing models are discussed. These include determining the level of aggregation of model construction, specifying the structure of the model, and the aggregation level of data to be employed in estimating model parameters. These issues are addressed through specifying and estimating both consumer-level and firm-level models and comparing the results. An important conclusion is that inferences about consumer behavior should not be drawn from firm-level models since aggregation bias may exist.