Abstract

This study established a 2-step model to measure the economic value of public relations by testing 2 relationships: the impact of public relations expense on reputation as a goal of public relations and the economic impact of reputation on companies' bottom lines. The proposed model illustrated an appropriate fitting, and coefficients were statistically significant. All 3 hypotheses were supported. The proposed 2-stage model for measuring the economic impact of public relations activities was supported by integrating the results of the hypothesis tests. The model containing a latent public relations expense illustrates a new empirical method for public relations evaluation.