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The impact of generic advertising and the free rider problem: A look at the US orange juice market and imports

Author

Listed:
  • Mark G. Brown

    (Florida Department of Citrus)

  • Jonq-Ying Lee

    (Florida Department of Citrus)

  • Thomas H. Spreen

    (Food and Resource Economics Department, University of Florida, Gainesville, FL 32611-0240)

Abstract

Increased demand for an advertised product may increase price, that, in turn, may lead to a free rider problem where competitive imports increase and result in a smaller price increase than otherwise. A study of Florida Department of Citrus advertising for orange juice indicated that the free rider problem has notably limited the impact of advertising on price in the US market. High US orange juice demand, which in part has been a result of advertising, has attracted substantial amounts of orange juice imports. Imports have eroded the impact of advertising on price by an estimated two-thirds. © 1996 John Wiley & Sons, Inc.

Suggested Citation

  • Mark G. Brown & Jonq-Ying Lee & Thomas H. Spreen, 1996. "The impact of generic advertising and the free rider problem: A look at the US orange juice market and imports," Agribusiness, John Wiley & Sons, Ltd., vol. 12(4), pages 309-316.
    • Handle: RePEc:wly:agribz:v:12:y:1996:i:4:p:309-316
    DOI: 10.1002/(SICI)1520-6297(199607/08)12:4<309::AID-AGR1>3.0.CO;2-2
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    References listed on IDEAS

    as
    1. Brown, Mark G & Lee, Jonq-Ying, 1993. "Alternative Specifications of Advertising in the Rotterdam Model," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 20(4), pages 419-436.
    2. Brown, Mark G. & Behr, Robert M. & Lee, Jonq-Ying, 1994. "Conditional Demand And Endogeneity? A Case Study Of Demand For Juice Products," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(1), pages 1-12, July.
    3. Ronald W. Ward & James E. Davis, 1978. "A Pooled Cross-Section Time Series Model of Coupon Promotions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(3), pages 393-401.
    4. Lee, Jonq-Ying & Fairchild, Gary F., 1988. "Commodity Advertising, Imports And The Free Rider Problem," Journal of Food Distribution Research, Food Distribution Research Society, vol. 19(2), pages 1-7, September.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Capps, Oral, Jr. & Williams, Gary W. & Dang, Trang, 2010. "Effects of Lamb Promotion on Lamb Demand and Imports," Reports 90492, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.
    2. 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.
    3. Brown, Mark G. & Spreen, Thomas H. & Lee, Jonq-Ying, 2004. "Impacts On U.S. Prices Of Reducing Orange Juice Tariffs In Major World Markets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(2), pages 1-8, July.

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