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A Method For Measuring Returns To Nonprice Export Promotion With Application To Almonds

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  • Kinnucan, Henry W.
  • Christian, Jason E.

Abstract

A formula is derived to indicate the marginal returns to nonprice promotion for a competitive industry that promotes in both the domestic and the export market and receives a subsidy for export promotion. Private returns to export promotion are an increasing function of the export promotion elasticity, the export share, and the promotion subsidy and a decreasing function of the domestic supply elasticity, the absolute values of the domestic and export demand elasticities, and opportunity cost. Applying the formula to almond promotion and using previously estimated elasticities, no firm conclusions can be made regarding the effectiveness of export promotion, chiefly because the estimated promotion elasticities are unstable. Assuming that the domestic promotion elasticity is robust, it appears that domestic market promotion is underfunded from a producer-welfare perspective unless the marginal rate of return on alternative uses of promotion funds is high, on the order of 115%.

Suggested Citation

  • Kinnucan, Henry W. & Christian, Jason E., 1997. "A Method For Measuring Returns To Nonprice Export Promotion With Application To Almonds," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(1), pages 1-13, July.
    • Handle: RePEc:ags:jlaare:31016
    DOI: 10.22004/ag.econ.31016
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    1. Marc Nerlove & Frederick V. Waugh, 1961. "Advertising without Supply Control: Some Implications of a Study of the Advertising of Oranges," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 43(4_Part_I), pages 813-837.
    2. Gary W. Williams, 1985. "Returns to US soybean export market development," Agribusiness, John Wiley & Sons, Ltd., vol. 1(3), pages 243-263.
    3. Alston, Julian M. & Carman, Hoy F. & Christian, Jason E. & Dorfman, Jeffrey H. & Murua, Juan-Ramon & Sexton, Richard J., 1997. "Optimal Reserve and Export Policies for the California Almond Industry : Theory, Econometrics, and Simulations," Monographs, University of California, Davis, Giannini Foundation, number 11937, December.
    4. Halliburton, Karen & Henneberry, Shida Rastegari, 1995. "The Effectiveness Of U.S. Nonprice Promotion Of Almonds In The Pacific Rim," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-14, July.
    5. 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, January.
    6. Hui-Shung Chang & Henry W. Kinnucan, 1991. "Economic effects of an advertising excise tax," Agribusiness, John Wiley & Sons, Ltd., vol. 7(2), pages 165-173.
    7. Roley R. Piggott & Nicholas E. Piggott & Vic E. Wright, 1995. "Approximating Farm-Level Returns to Incremental Advertising Expenditure: Methods and an Application to the Australian Meat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 497-511.
    8. Alston, Julian M. & Carman, Hoy F. & Chalfant, James A., 1994. "EVALUATING PRIMARY PRODUCT PROMOTION: The Returns to Generic Advertising by a Producer Cooperative in a Small, Open Economy," Promotion in the Marketing Mix: What Works, Where and Why, April 28-29, 1994, Toronto, Canada 279601, Regional Research Projects > NECC-63: Research Committee on Commodity Promotion.
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    Cited by:

    1. Schmit, Todd M. & Kaiser, Harry M., 1998. "Egg Advertising, Dietary Cholesterol Concerns, and U.S. Consumer Demand," Agricultural and Resource Economics Review, Cambridge University Press, vol. 27(1), pages 43-52, April.
    2. Capps, Oral, Jr. & Williams, Gary W., 2006. "The Economic Effectiveness of the Cotton Checkoff Program," Reports 90753, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.
    3. Kinnucan, Henry W., 1999. "Advertising Traded Goods," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(1), pages 1-19, July.
    4. John M. Crespi & Adriana Chacón-Cascante, 2004. "Do U.S. marketing orders have much market power? An examination of the Almond Board of California," Agribusiness, John Wiley & Sons, Ltd., vol. 20(1), pages 1-15.
    5. John M. Crespi, 2003. "The Generic Advertising Controversy: How Did We Get Here and Where Are We Going?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 294-315.
    6. Henry W. Kinnucan & Maria Thomas, 1997. "Optimal Media Allocation Decisions For Generic Advertisers," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 425-441, January.
    7. Onunkwo, Izuchukwu M. & Epperson, James E., 1999. "Export Demand For U.S. Pecans: Impacts Of U.S. Export Promotion," 1999 Annual meeting, August 8-11, Nashville, TN 21686, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Onunkwo, Izuchukwu M. & Epperson, James E., 2001. "Export Demand For U.S. Almonds: Impacts Of U.S. Export Promotion Programs," Journal of Food Distribution Research, Food Distribution Research Society, vol. 32(1), pages 1-12, March.
    9. Holloway, Garth J. & Peyton, L. James & Griffith, Garry R., 2000. "Was the Australian Meat and Live-stock Corporation's advertising efficient?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(1), pages 1-27.
    10. Freebairn, John W. & Alston, Julian M., 2001. "Generic advertising without supply control: implications of funding mechanisms for advertising intensities in competitive industries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(1), pages 1-29.
    11. Lana Awada & Peter W. B. Phillips, 2021. "The distribution of returns from land efficiency improvement in multistage production systems," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(1), pages 73-92, March.
    12. Henry W. Kinnucan & Øystein Myrland, 2001. "A note on measuring returns to nonprice export promotion," Agribusiness, John Wiley & Sons, Ltd., vol. 17(3), pages 423-433.

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