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| Kinnucan, Henry W.. |
| This paper determines the impact of food industry market power on farmers' incentive to promote in a situation where funds for promotion are raised through a per-unit assessment on farm output and food industry technology is characterized by variable proportions. Specifically, building on earlier studies by Azzam and by Holloway, Muth's model is extended to consider the farm-level impacts of generic advertising when downstream firms possess oligopoly and/or oligopsony power and advertising expenditure is endogenous at the market level. Applying the model to the U.S. beef industry, we find that for plausible parameter values market power reduces farmers' incentive to promote. However, the disincentive is moderated by factor substitution, and effectively... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Dorfman-Steiner theorem; Generic advertising; Oligopoly power; Oligopsony power; Marketing; L66; Q13; Q17. |
| Ano: 2002 |
URL: http://purl.umn.edu/19775 |
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| Kinnucan, Henry W.; Myrland, Oystein. |
| Buse’s concept of total response is extended to advertising effects. Results suggest that partial advertising elasticities overstate advertising’s ability to increase market demand. One implication is that advertising bans (e.g., for alcohol and tobacco) are apt to be less effective than indicated by partial advertising elasticities estimated from econometric models. Extending the concept of total response to price effects, the total advertising “flexibility” sets the lower bound on the optimal advertising-sales ratio and subsumes the Dorfman-Steiner and Nerlove-Waugh theorems as special cases. Applying the total flexibility concept to U.S. meats, results suggest the beef, pork and poultry industries are under-investing in advertising. However, in the case... |
| Tipo: Working Paper |
Palavras-chave: Advertising bans; Dorfman-Steiner theorem; Generic advertising; Total elasticities; Livestock Production/Industries; Marketing. |
| Ano: 2002 |
URL: http://purl.umn.edu/122634 |
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