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In their recent survey of research on the relationship between advertising and competition, William S. Comanor and Thomas A. Wilson conclude that, "The weight of available evidence is consistent with the hypothesis that heavy advertising can have substantial anticompetitive consequences." This conclusion is based on selective acceptance of the available evidence. The analysis shows that some of the evidence they accept is of questionable validity. Also, their survey ignores evidence concerning the impact of advertising on market penetration. In their recent survey, Comanor and Wilson asserted that the evidence shows there to be a connection between advertising efficiency and size of advertising expenditure. Finally, Simon's conclusions presume that the presence of economies of scale in advertising are necessary for advertising to have a depressing effect on competition. However, this is not the case, if advertising by established firms raises barriers to entry, adverse competitive effects could occur even when there are no scale economies in advertising. Although scale economies are one factor that could create entry barriers, they are not the only factor.

This article presents abstracts of several papers about economics published in the May 1965 issue of the journal Review of Economics and Statistics. In the article The Changing Structure of Unemployment: An Econometric Study, Lester C. Thurow developed an econometric model to explain changes in unemployment by sex, race, age, occupation and industry. Using this model the paper shows that much of the change in unemployment can be explained by the rate of growth of gross national product. While in the article The Structure and Determinants of Local Public Investment Expenditures, Niles M. Hansen developed a substantial number of hypotheses concerning four principal groups of causal factors affecting municipal investment requirements.

The author discusses U.S. expenditures on pharmaceuticals. He tackles the controversy on U.S. spending on drugs and on the sale of drugs by pharmaceutical companies, the difference between the branded and the generic pharmaceutical industry in terms of sales, the impact of price and quantities on drug expenditures, the U.S. payment system for pharmaceuticals and the impact of drug consumption on health.

Objectives: Cost-effectiveness analysis of branded pharmaceuticals presumes that both cost (or price) and marginal effectiveness levels are exogenous. This assumption underlies most judgments of the cost-effectiveness of specific drugs. In this study, we show the theoretical implications of letting both factors be endogenous by modeling pharmaceutical price setting with and without health insurance, along with patient response to the prices that depend on marginal effectiveness. We then explore the implications of these models for cost-effectiveness ratios., Methods: We used simple textbook models of patient demand and pricing behavior of drug firms to predict market equilibria in the drug and insurance markets and to generate calculations of the cost-effectiveness ratios in those settings., Results: We found that ratios in market settings can be much different from those calculated in cost-effectiveness studies based on exogenous prices and treatment of all patients at risk rather than those who would demand treatment in a market setting. We also found that there may be considerable similarity in these market cost-effectiveness ratios across different products because drug firms with market power set profit-maximizing prices., Conclusions: We found that market cost-effectiveness ratios will always indicate an excess of benefits over cost. Insurance will lead to less favorable ratios than without insurance, but when insurers bargain with drug firms, rather than taking their prices as given, cost-effectiveness ratios will be more favorable., (Copyright © 2021 ISPOR–The Professional Society for Health Economics and Outcomes Research. Published by Elsevier Inc. All rights reserved.)