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Profitability Of Incremental Expenditure On Fibre Promotion

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  • Hill, Debbie J.
  • Piggott, Roley R.
  • Griffith, Garry R.
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    Abstract

    In this paper the impact of changes in wool promotion expenditure and changes in expenditure on the promotion of competing fibres are examined using an equilibrium displacement model. The emphasis is on examining impacts on producer profits net of promotion expenditure and on benefit-cost ratios measuring changes in producer surplus relative to changes in promotion expenditure. It was found, for example, that incremental expenditure on apparel wool promotion on the domestic market is unprofitable but incremental expenditure on promotion of apparel wool on the export market is generally profitable. Further, it was found that increased promotion of cotton and man-made fibres on the export market, with promotion of apparel wool unchanged, would reduce profits to apparel wool producers. Finally, a case is made for improved data availability in order to allow more comprehensive ex-ante and ex-post evaluations of promotion programs, thereby increasing the intensity of scrutiny of promotion programs to a level more in line with that for investment in rural research and development.

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    File URL: http://purl.umn.edu/22370
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    Bibliographic Info

    Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.

    Volume (Year): 40 (1996)
    Issue (Month): 03 (December)
    Pages:

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    Handle: RePEc:ags:ajaeau:22370

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    Keywords: Marketing;

    References

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    1. Solomon, H. & Kinnucan, Henry W., 1993. "Effects Of Non-Price Export Promotion: Some Evidence For Cotton," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 37(01), April.
    2. Lewis, Jack Neville & Bereza, S., 1977. "The Promotion Of Wool-Synthetic Fibre Blends: A Comment," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(03), September.
    3. Mullen, John D. & Alston, Julian M. & Wohlgenant, Michael K., 1989. "The Impact Of Farm And Processing Research On The Australian Wool Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 33(01), April.
    4. Piggott, Roley R., 1992. "Some Old Truths Revisited," 1992 Conference (36th), February 10-13, 1992, Canberra, Australia 147251, Australian Agricultural and Resource Economics Society.
    5. Schrimper, Ronald A., 1977. "Comments On Tisdell'S Critique Of Nerlove-Waugh Theorem Concerning Optimal Advertising," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(04), December.
    6. Piggott, Roley R., 1992. "Some Old Truths Revisited," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(02), August.
    7. Quilkey, John J., 1986. "Promotion Of Primary Products - A View From The Cloister," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 30(01), April.
    8. Lewis, Jack Neville, 1979. "Floor Prices and Wool Promotion: Some Further Hidden Costs?," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 47(02), August.
    9. Scobie, Grant M. & Mullen, John D. & Alston, Julian M., 1991. "The Returns To Investment In Research On Australian Wool Production," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(02), August.
    10. Mues, Colin & Simmons, Phil, 1988. "The Effects of US Farm Policy on Australian Cotton Revenues," 1988 Conference (32nd), February 8-11, 1988, Melbourne, Australia 144045, Australian Agricultural and Resource Economics Society.
    11. Tisdell, Clement A., 1976. "The Promotion Of Wool And Synthetic Fibre Blends: Some Alternative Strategies For The Wool Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 44(03), September.
    12. H. W. Kinnucan, 1996. "A Note On Measuring Returns To Generic Advertising In Interrelated Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1-4), pages 261-267.
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    Citations

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    Cited by:
    1. Vere, David T. & Jones, Randall E. & Dowling, Peter, 2004. "An Economic Evaluation of Research into the Improved Management of the Annual Grass Weed Vulpia in Temperate Pastures in South-Eastern Australia," Research Reports 42503, New South Wales Department of Primary Industries Research Economists.
    2. Hoque, Ziaul & Farquharson, Robert J. & Taylor, Ian & Walker, Steve & Osten, Vikki & Jones, Randall E., 2003. "The economic cost of weeds in dryland cotton production systems of Australia," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57893, Australian Agricultural and Resource Economics Society.
    3. Hill, D. J. & Piggott, R. R. & Griffith, G. R., 2001. "Profitability of incremental generic promotion of Australian dairy products," Agricultural Economics, Blackwell, vol. 26(3), pages 253-266, December.
    4. Dent, Siobahn K. & Piggott, Roley R. & O'Donnell, Christopher J. & Griffith, Garry R., 2003. "Does Excluding Cross-commodity Interactions Matter? Beef and Lamb in Australia," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57859, Australian Agricultural and Resource Economics Society.
    5. Brennan, John P. & Singh, Rajinder Pal & Singh, Inder Pal, 1999. "Economic Issues in Assessing Research Priorities in Feed Grains Nutrition," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 123789, Australian Agricultural and Resource Economics Society.
    6. Zhao, Xueyan & Mullen, John D. & Griffith, Garry R., 2005. "Economic Surplus Measurement in Multi-Market Models," Working Papers 12910, University of New England, School of Economics.
    7. Vere, D. T. & Jones, R. E. & Saunders, Glen, 2004. "The economic benefits of rabbit control in Australian temperate pastures by the introduction of rabbit haemorrhagic disease," Agricultural Economics, Blackwell, vol. 30(2), pages 143-155, March.
    8. Brennan, John P. & Singh, Rajinder Pal, 2000. "Economic Assessment of Improving Nutritional Characteristics of Feed Grains," Research Reports 28000, New South Wales Department of Primary Industries Research Economists.
    9. Hill, Debbie J. & Piggott, Roley R. & Griffith, Garry R., 1999. "Profitability Of Incremental Generic Promotion Expenditure By Australian Dairy Farmers," Working Papers 12913, University of New England, School of Economics.
    10. Zhao, Xueyan & Mullen, John D. & Griffith, Garry R. & Griffiths, William E. & Piggott, Roley R., 2000. "An Equilibrium Displacement Model of the Australian Beef Industry," Research Reports 28007, New South Wales Department of Primary Industries Research Economists.

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