Journal Article

Dynamic Model of Fresh Fruit Promotion: A Household Production Approach

Timothy J. Richards

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 81, issue 1, pages 195-211
Published in print February 1999 | ISSN: 0002-9092
Published online February 1999 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/1244460
Dynamic Model of Fresh Fruit Promotion: A Household Production Approach

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Many studies consider the dynamic effects of commodity promotion on demand, but few derive the theoretical basis for these effects in a model of optimal consumer behavior. This study develops a dynamic household production model of U.S. fresh fruit consumption, which it uses to evaluate the effectiveness of advertising and promotion expenditures by the Washington Apple Commission. Estimates from a dynamic-dual Generalized Leontief system show direct advertising to be marginally more effective than retail promotion in increasing apple sales, but advertising has positive spillover effects to sales of other fruits, whereas promotion reduces sales of competing products.

Keywords: advertising; apples; cost-of-adjustment; dynamic-dual; household-production; promotion; M370; Q120; Q130

Journal Article.  0 words. 

Subjects: Marketing ; Agricultural Economics

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