Advertising and Competition in Routine Legal Service Markets

This study's findings, together with the results of earlier studies of the relationship between advertising and market prices, provide considerable empirical support for the pro-competitive view of seller advertising. Data on attorney fees and advertising practices in seventeen metropolitan areas across the U.S. were used to estimate the effect of market advertising intensity on firm demand elasticities, holding other possible influencing factors constant. The results obtained for all three routine legal services examined are consistent with the hypothesis that advertising increases competition among sellers in a market.