I am trying to model the effect of advertisement on sales in Stata. The data is weekly and there are around 150 observations. I started by applying an ARMAX(1,0,1) model with the following exogenous variables: investment in advertisement, quantities bought by visit and some seasonal dummies (Q1, Q2, Q3).
I would like to have some ideas regarding the model:
- Is this the best model to estimate the coefficients accurately?
- Should I be worried about endogeneity?
- Is there any way to impose (or test) diminishing returns for the investment in advertisement?