Promotion Research Program
Projects and Presentations (Cont'd)
95-1 Generic and Price Effects of New Product Promotion in the California Almond Industry(Carman @ University of California, Davis) - This project was completed on December 31, 1996. The objective was to develop estimates of the impact of producer-financed advertising and promotion on the demand for California almonds, and the effects on producer returns in both the short and long run. The econometric model was specified, including advertising, and estimated using two sets of advertising data. The first series for advertising was the fiscal year advertising and promotion expenses for Blue Diamond and the second was calendar year consumer media advertising by Blue Diamond and Dole nuts (collected by LNA). The initial results indicated that advertising had a significant positive effect on the demand for almonds. However, there was some concern of possible specification problems and future work will focus on correcting these problems.
95-2 Evaluating U.S. Market Promotion Expenditures in the Japanese Beef Market (Mittelhammer and Wahl @ Washington State University) - This study will be completed in September of 1996. The primary objective of the project is to evaluate the significance and quantify the effectiveness of MPP/TEA expenditures on promoting and advertising U.S. beef in the Japanese market. An inverse AIDS demand model was developed which disaggregated beef, pork, and chicken commodities into groups based upon origin, including U.S., non-U.S., and domestic (Japanese) origin. The results from all scenarios imply that there is a positive and statistically significant effect of MPP advertising and promotion efforts on Japanese demand for U.S. beef. On the other hand, the effects of MPP advertising and promotion are uniformly insignificant for pork and chicken. In the case of beef, and for the model incorporating only current advertising/promotion efforts, the advertising/promotion coefficient was estimated to be .641. For the model incorporating the partial adjustment mechanism for representing the impact of advertising/promotion, the partial adjustment coefficient was estimated to be .76, with the effect of past advertising/promotion efforts then geometrically declining year by year.
Publications:
Comeau, A., R. C. Mittelhammer, and T. I. Wahl. "Assessing the Effectiveness of MPP Meat Advertising and Promotion in the Japanese Market." Paper Submitted at the American Agricultural Economics Association Summer Meetings held in Toronto, Canada, 1997.
Comeau, A., R. C. Mittelhammer, and T. I. Wahl. "Assessing the Effectiveness of MPP Meat Advertising and Promotion in the Japanese Market." NICPRE Research Bulletin 96-20, National Institute for Commodity Promotion Research and Evaluation Research Bulletin Cornell University, December 1996.
95-3 Linkage of Generic and Brand Advertising: Understanding the Fundamental Differences in a Commodity Market (Ward and Lee @ University of Florida) - Project was completed on September 30, 1996. This research identified the economic situations where the individual could more effectively impact his/her demand relative to what could be achieved collectively. A theoretical model of industry supply and demand was set forth where checkoff dollars were already incorporated into the demand function. Individual demands for some firms were adjusted as brand advertising was incorporated into the models. While this was not an empirical analysis in the traditional framework, using the theoretical framework and assumed responses, numerous situations were simulated altering the assumptions (parameters and number n).
Publications:
Ward, Ronald W. "Advertising and Promotions," in Agro-Food Marketing. Wallingford: CAB International, 1997.
Ward, Ronald W. "Commodity Promotions: A Global View," in Agricultural Commodity Promotion Policies and Programs in the Global Agri-Food System. Ferrero, Ackerman, and Nichols (eds). Proceedings of the NEC-63 Conference held May 26-27, 1996 in Cancun, Mexico. Ithaca: NICPRE, 1996.
Ward, Ronald W. "Institutional Setting and Issues: Discussant," in Economic Analysis of Meat Promotion. Kinnucan, Lenz, and Clary (eds). Proceedings of the NEC-63 Conference held June 2-3, 1995 in Denver, Colorado. Ithaca: NICPRE, 1995.
Ward, Ronald W. "Economic Returns from the Beef Checkoff." NICPRE Quarterly 1(1995):1-3.
Ward, Ronald W. and Wanki Moon. "Evaluating the U.S. Beef Checkoff: An Alternative Approach," in Economic Analysis of Meat Promotion. Kinnucan, Lenz, and Clary (eds). Proceedings of the NEC-63 Conference held June 2-3, 1995 in Denver, Colorado. Ithaca: NICPRE, 1995.
95-4 Measurement of Agricultural Producer Attitudes Toward Commodity Checkoff Programs (Clary @ New Mexico State University) - A continuing project until June 1997. The objectives are to: (i) evaluate farmer/rancher attitudes toward commodity promotion programs and commodity checkoff boards; (ii) determine willingness to contribute funding for these programs; (iii) determine the average number of programs that a producer financially supports; (iv) evaluate whether attitudes toward commodity checkoff programs are tied to the number of programs supported by a producer; and (v) determine the extent to which demographic and/or psychographic characteristics can be used to predict support for checkoff programs. Survey participants will be chosen from a purchased list of randomly selected U.S. agricultural producers. Literature from the psychology and marketing fields is being examined to identify possible psychological segmentation constructs. The survey is scheduled for January 1996. A random sample of U.S. producers will be conducted by mail to determine their attitudes and support for checkoff programs. Analysis will be conducted to determine factors that explain differences.
Publications:
Villasenor, Martha, Cynda R. Clary, and Robert Steiner. "U.S. Agricultural Producer Attitudes Toward Commodity Checkoff," in Economic Evaluation of Commodity Promotion Programs in the Current Legal and Political Environment. Ferrero and Clary (eds). Proceedings of the NEC-63 Conference held October 7-8, 1996 in Monterey, California. Ithaca: NICPRE, 1997.
95-5 Optimality of U.S. Pork Export Promotion Program in Japan (Liu @ University of Minnesota and Kaiser @ Cornell University) - A continuing project since FY95. The objective of the research is to develop a model to determine the optimal level of U.S. export promotion activities in Japan given competition and strategic interaction among major exporting countries. A literature review has been conducted in the area of economic analysis of commodity promotion and in the area of Japanese meat marketing. The next step is to develop and simulate the impacts of a two-stage subgame perfect model. In the second stage of the model, exporting firms choose their decision variables, given the demand conditions for their products in Japan. In the first stage, the commodity organization attempts to shift the demand in favor of its constituents by choosing the optimal level of export promotion activities, given the optimal rule to be played out in the second stage of the game.
Publications:
Liu, Donald J. "Strategic Export Promotion: An Introduction," in New Methodologies for Commodity Promotion Economics. Kaiser, Kinnucan, and Ferrero (eds). Proceedings of the NEC-63 Conference held October 5-6, 1995 in Sacramento, California. Ithaca: NICPRE, 1996.
95-6 U.S. Export Promotion of Bulk Products: Analysis of Federal Wheat Programs (Henneberry @ Oklahoma State University) - A continuing project in FY96. The objective of this research is to evaluate the effectiveness of U.S. export promotion programs--the Cooperator Market Development Program (CMDP) and the Market Promotion Program (MPP)--on U.S. exports of wheat to selected countries. Econometric models have been constructed to estimate the impacts of promotion expenditures on U.S. market shares. The models include Double-log (Cobb-Douglas), Linear, Translog, and AIDS. The endogenous variables in the first three models are U.S. exports of wheat to the selected markets. The exogenous variables are U.S. and other exporters' wheat prices, rice price, the importing country's GDP, nonprice export promotion variables, and intercept dummy variables. Pooled time-series cross sectional data are used to analyze the period of 1973 through 1993. In addition to FAS contribution to CMDP and MPP, second and third party contributions were also included.
96-1 Demand Response to Advertising: Methodology and Applications to Commodities of Importance to California (Alston @ University of California, Davis) - A new project in FY96 to be completed during the period October 1, 1995 to September 30, 1997. The objective of this study is to develop improved methods and measures of the benefits and costs of generic commodity advertising and promotion programs, and to apply those methods to evaluate generic advertising and promotion of agricultural commodities important to California. To date, an econometric study of the California Table Grape industry has been completed, which has been submitted for publication to the Giannini Foundation, and two other papers have been submitted to journals for review. A primary purpose for this project is to develop a new demand system and a new data set on U.S. meat consumption to apply a new model.
Publications:
Alston, J. M., J. A. Chalfant, and N. E. Piggott. "Advertising and Consumer Welfare: Scaling versus Translating." Paper Presented to the 41st Annual Conference of Australian Agricultural and Resource Economics Society held January 20-25, 1997 in Gold Coast.
Alston, J. M., J. A. Chalfant, and N. E. Piggott. "Advertising and Consumer Welfare." Presented at the NEC-63 Conference held October 7-8, 1996 in Monterey, California.
Alston, J. M., J. A. Chalfant, and N. E. Piggott. "Demand Response and Returns to Incremental Advertising in the Australian Meat Industry," in Economic Analysis of Meat Promotion. Kinnucan, Lenz, and Clary (eds). Proceedings of the NEC-63 Conference held June 2-3, 1995 in Denver, Colorado. Ithaca: NICPRE, 1995.
Alston, J. M., J. A. Chalfant, J. E. Christian, E. Meng, and N. E. Piggott. "The California Table Grape Commission's Promotion Program: An Evaluation," in a forthcoming Giannini Foundation Monograph.
Alston, J.M., J.A. Chalfant, J.E. Christian, E. Meng, and N.E. Piggott. "The California Table Grape Commission's Promotion Program: Overview and Summary," in Economic Evaluation of Commodity Promotion Programs in the Current Legal and Political Environment. Ferrero and Clary (eds). Proceedings of the NEC-63 Conference held October 7-8, 1996 in Monterey, California. Ithaca: NICPRE, 1997.
Piggott, N. E. "Demand Response to Advertising in the Australian Meat Industry." NICPRE Research Bulletin 96-02, National Institute for Commodity Promotion Research and Evaluation, Cornell University, July 1996.
96-2 Survey of Commodity Promotion Organizations (Lenz @ Cornell University and Kinnucan @ Auburn University) - A new project in FY96 that will be completed by December 1996. The objective of this survey is to determine the number of commodity promotion organizations in existence in the United States and to determine their source of funding, the nature of their programs, and the way they are organized to achieve their objectives. A comparison with an earlier survey conducted in 1990 will determine the changes that have occurred over a period of five years. The survey has been completed. The responses are currently being summarized.
96-3 Ex Post Analysis of Generic Egg Advertising in the United States (Kaiser, Reberte, and Schmit @ Cornell University) - A new project in FY96 that was completed in August 1996. The objective of the project was to evaluate the impact of generic egg advertising in the United States on egg prices, production, and net producer revenue. The findings indicated that the generic egg advertising had a positive and statistically significant impact on the farm egg price. Generic egg advertising led to a substantial increase in producer net revenue, and the marginal rate of return, which is the ratio of the increase in net revenue to the cost of the advertising program from 1990 to 1995, was 4.69.
Publications:
Reberte, J. Carlos, Todd M. Schmit, and Harry M. Kaiser. "An Ex Post Evaluation of Generic Egg Advertising in the U.S.," in Economic Evaluation of Commodity Promotion Programs in the Current Legal and Political Environment. Ferrero and Clary (eds). Proceedings of the NEC- 63 conference held October 7-8, 1997 in Monterey, California. Ithaca: NICPRE, 1997.
Reberte, J. Carlos, Todd M. Schmit, and Harry M. Kaiser. "An Ex Post Evaluation of Generic Egg Advertising in the U.S." NICPRE Quarterly 7(1996):1-2.
Reberte, J. Carlos, Todd M. Schmit, and Harry M. Kaiser. "An Ex Post Evaluation of Generic Egg Advertising in the U.S." Report Given to the American Egg Board in July 1996 at Cornell University.
Reberte, J. Carlos, Todd M. Schmit, and Harry M. Kaiser. "An Ex Post Evaluation of Generic Egg Advertising in the U.S." Paper Presented at the Annual Conference of the Western Economic Association International Association on July 1, 1996 in San Francisco, California.
96-4 Economic Analysis of Generic Egg Advertising in California (Kaiser, Schmit, and Reberte @ Cornell University) - A new project in FY96 that was completed in August 1996. Money spent on generic egg advertising in California had a positive and statistically significant impact on egg prices over the ten-year period. The model indicated that a 1 percent increase in advertising expenditure resulted in an average increase of 0.13 percent in the producer egg price, holding all other demand factors constant. Furthermore, a 1 percent increase in real advertising expenditures resulted in a $2.1 million increase in producer net revenue over the period, 1985-95. This translated into a marginal rate of return of 7.0.
Publications:
Schmit, Todd M., J. Carlos Reberte, and Harry M. Kaiser. "An Economic Evaluation of Generic Egg Advertising in California, 1985-95," in Economic Evaluation of Commodity Promotion Programs in the Current Legal and Political Environment. Ferrero and Clary (eds). Proceedings of the NEC-63 Conference held October 7-8, 1996 in Monterey, California. Ithaca: NICPRE, 1997.
Schmit, Todd M., J. Carlos Reberte, and Harry M. Kaiser. "An Economic Evaluation of Generic Egg Advertising in California, 1985-95." NICPRE Quarterly 7(1996):2.
Schmit, Todd M., J. Carlos Reberte, and Harry M. Kaiser. "An Economic Analysis of Generic Egg Advertising in California, 1985-95." Report Given to the California Egg Commission in July 1996 at Cornell University.
Schmit, Todd M., Carlos Reberte, and Harry M. Kaiser. "An Economic Analysis of Generic Egg Advertising in California, 1985-95." Agribusiness (forthcoming).
97-1 Predicting Participation in Commodity Checkoffs under Voluntary Programs: An Experimental Economics Approach (Kaiser and Schulze @ Cornell University) - This is a new project in FY97. With the courts reviewing the constitutionality of mandatory commodity checkoff programs, it is possible that these programs will revert back to being voluntary. Therefore, it is important to determine what participation would be, or, alternatively, what free-ridership would be under alternative voluntary institutional arrangements. This project will use experiments to measure participation in voluntary checkoffs under a variety of institutional settings including mandatory programs with refunds, continuous fee structures, and traditional voluntary programs.
97-2 The Economics of Milk Advertising with Changes in International Dairy Policy (de Gorter and Kaiser @ Cornell University) - This is a new project beginning in FY97. The goal is to determine the analytical and empirical implications of milk advertising with the current and potential policy changes facing the U.S. dairy sector. Kaiser's econometric model of the national dairy industry will be calibrated to assess the empirical effects while a standard trade model will be developed with advertising to assess the analytical effects of policy changes.
97-3 Mandatory Commodity Promotion and the Allocation of Producer Levies (Holloway @ University of California, Davis) - This is a new project beginning in FY97. This project derives rules for optimal allocation of farm checkoff revenue, links the rules to observable characteristics of the food marketing industries, and derives empirically refutable propositions about the optimal receipt and disbursement of levies collected for the purpose of funding downstream research and promotion activities.
97-4 A Comparison of Alternative Methods of Estimating Rates of Return to Promotion (Davis and Nichols @ Texas A&M University) - This is a new project beginning in FY97. This project will compare and assess alternative methods of calculating and estimating rates of return to promotion activities. This methodological study will examine the impact of omitted variables and measurement misspecification on rate of return estimates. This is important in order to see how sensitive rates of return are to model misspecification.
97-5 Free-Riders in Commodity Research and Promotion Programs (Tilly and Henneberry @ Oklahoma State University) - This is a new project beginning in FY97. The objective of this study will be to identify economic conditions, social behaviors, demographic characteristics, information status, and attitudes of producers that are related to requests for refunds of producer contributions to the wheat checkoff program in Oklahoma and Kansas. The data for the analysis will be generated by a mail survey of producers requesting refunds in these two states.
97-6 Economic Analysis of USDA's Subsidy Programs for Nonprice Export Promotion (Kinnucan @ Auburn University) - This is a new project beginning in FY97. This project has three broad objectives. First, to determine the differential impact of technical assistance, trade servicing, and consumer promotions on producer welfare. Second, to construct a "promotability index" to guide allocation decisions across commodities. Finally, to determine the impact of subsidies for export promotion on industry investment in domestic and export promotion.
Publications:
Kinnucan, H. W. and H. Xiao. "A Theory of Nonprice Export Promotion with Application to USDA's Subsidy Programs." NICPRE Research Bulletin 96-09, National Institute for Commodity Promotion Research and Evaluation, Cornell University, 1996 (also in review with American Journal of Agricultural Economics).
Xiao, H. and H. W. Kinnucan. "Distributions of Gains from Alternative Export Promotion: Strategies in Multi-Stage Production System." (unpublished manuscript).
97-7 Rates of Return on Individual vs. Collective Promotions (Alston @ University of California, Davis) - This is a new project beginning in FY97. This project will examine issues associated with examining whether rates of return for promotion and advertising activities are higher for individual vs. collective action by producers.
97-8 NEC-63 Proceedings (Various editors @ various institutions) - This ongoing project publishes proceedings from the various conferences of NEC-63 from 1994 to present.
Publications:
Ferrero, J.L., K.Z. Ackerman, and J.P. Nichols (eds). Agricultural Commodity Promotion Policies and Programs. Proceedings of the NEC-63 Conference held May 26-27, 1996 in Cancun, Mexico. Ithaca: NICPRE, 1996.
Goddard, E.W. and D.S. Taylor (eds). Promotion in the Marketing Mix: What Works, Where and Why. Proceedings of the NEC-63 conference held April 28-29, 1994 in Toronto, Ontario, Canada. Guelph: University of Guelph, 1994.
Kaiser, H.M., H.W. Kinnucan, and J.L. Ferrero (eds). New Methodologies for Commodity Promotion Economics. Proceedings of the NEC-63 Conference held October 5-6, 1995 in Sacramento, California. Ithaca: NICPRE, 1996.
Kinnucan, H.W., J.E. Lenz, and C.R. Clary (eds). Economic Analysis of Meat Promotion. Proceedings of NEC-63 Conference held June 2-3, 1995 in Denver, Colorado. Ithaca: NICPRE, 1995.
Nichols, J.P., H.W. Kinnucan, and K.Z. Ackerman (eds). Economic Effects of Generic Promotion Programs for Agricultural Exports. Proceedings of the NEC-63 Conference held February 22-23, 1990 in Washington, D.C. College Station: Texas A&M University, 1991.
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