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Figure 1From “Every growth budget is a gross number”

The same asset, left alone, at three published rates

Ten years after the maintaining spend stops, the same starting asset is at 78%, 11% or effectively nothing, depending only on which published rate you take. This is the spread a budget is asked to absorb.

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Figure 1The same asset, left alone, at three published rates

One asset decaying at three published rates over ten years A line chart. The horizontal axis runs from zero to ten years since the maintaining spend stopped; the vertical axis is the share of the asset still standing, from zero to 100 per cent. Three curves start together at 100. At 2.5 per cent a year the curve is almost flat and ends at 78. At 20 per cent a year it passes half after 3.1 years and ends at 11. At 55 per cent a year it passes half after 10 months and is effectively at zero within four years. 0204060801000246810 Share of the asset still standing (%) Years since the maintaining spend stopped 78 11 0 10 months 3.1 years Organisational capital, 20%/yr: assumed, never estimatedAdvertising capital, 55%/yrConsumption experience in preference, 2.5%/yr

Source: Curves computed as (1 − d) raised to the power t, from the rates in Table 1: 2.5% a year (Bronnenberg, Dubé & Gentzkow 2012), 20% (the assumed organisational-capital rate, Ewens, Peters & Wang 2019, revised October 2023), 55% (Corrado et al. 2016 via Bronnenberg, Dubé & Syverson 2022). A disclosed model, not measured data.

PNG4:3, 1600 × 1200, with the title, the source line and the attribution set in the image isoglu-2026-every-growth-budget-is-a-gross-number-fig02.png

Source and evidence

Each line names a claim related to this exhibit, its source, and how it was checked.

  • A BDG12-C1 The 2.5% rate measures decay of one year's consumption experiences in brand preference, not advertising capitalBronnenberg, Dube & Gentzkow (2012), p. 2474
  • A EPW24-C1 The organisational-capital depreciation rate is assumed rather than estimated, which is why the paper's own contrast is with the estimated R&D rate: "The results of our parameter estimation imply an average 33% annual depreciation rate for R&D versus 23% for BEA R&D depreciation rates where industry coverage is available"Ewens, Peters & Wang (2019, revised 2023), note to Table 1
  • A BDS22-C2 They adopt a 55% annual advertising-capital depreciation rate from Corrado et al. (2016)Bronnenberg, Dube & Syverson (2022), section II

Grades: A, verified against the printed page of the primary source · B, primary source, text layer only · C, authoritative secondary · D, reported.

From the essay

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APA 7

Isoglu, S. (2026). The same asset, left alone, at three published rates [Figure]. isoglu.com. https://isoglu.com/insights/exhibits/isoglu-2026-every-growth-budget-is-a-gross-number-fig02/

BibTeX
@misc{isoglu-2026-every-growth-budget-is-a-gross-number-fig02,
  author = {Isoglu, Sinan},
  title = {{The same asset, left alone, at three published rates}},
  year = {2026},
  howpublished = {Figure 1, isoglu.com},
  url = {https://isoglu.com/insights/exhibits/isoglu-2026-every-growth-budget-is-a-gross-number-fig02/},
  note = {From the essay {Every growth budget is a gross number}}
}
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  <a href="https://isoglu.com/insights/exhibits/isoglu-2026-every-growth-budget-is-a-gross-number-fig02/">
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  <figcaption>Figure 1: The same asset, left alone, at three published rates. Source: Curves computed as (1 − d) raised to the power t, from the rates in Table 1: 2.5% a year (Bronnenberg, Dubé &amp; Gentzkow 2012), 20% (the assumed organisational-capital rate, Ewens, Peters &amp; Wang 2019, revised October 2023), 55% (Corrado et al. 2016 via Bronnenberg, Dubé &amp; Syverson 2022). A disclosed model, not measured data. <a href="https://isoglu.com/insights/exhibits/isoglu-2026-every-growth-budget-is-a-gross-number-fig02/">View exhibit</a>.</figcaption>
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