Advertising: What Is Not Seen
By Bryan Caplan
Here’s a gem from the first article in Henderson’s Concise Encyclopedia of Economics:
The rise of the self-service store, for example, was aided by consumer knowledge of branded goods. Before the advent of advertising, customers relied on knowledgeable shopkeepers in selecting products, which often were unbranded. Today, consumer familiarity with branded products is one factor that makes it possible for far fewer retail employees to serve the same number of customers.
When I read this, I had to admit: “I’ve never thought of this.” In a world without advertising, how would you know what to buy? The blessings of Big Box stores would be beyond our reach.
This is particularly striking to me, because I can’t stand advertising, and have managed to isolate myself from most of it. And yet, I benefit immensely from its existence, because I free ride on other consumers’ knowledge. People who watch commercials give me advice about what to buy – and make self-service retail feasible. They drive me crazy, but thanks!