Advertising and the Professions

This article aims to assess the consequences for prices and consumer protection of permitting professional advertising. The need to protect consumers given their lack of knowledge in the buying of professional services is seen as explaining the role of professional self-regulation particularly with respect to entry standards. But the case is not so strong for advertising restrictions, and it is shown that there are logical reasons to expect such restrictions to raise fees without much protecting the consumer. Empirical studies are surveyed confirming the favourable effect of advertising on prices. The conclusion reached is that specific advertising of fees and specialism would not necessarily be costly to monitor and would bring benefits in terms of increased price competition.