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Distributional effects of commodity promotion programs by type of producer

Author

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  • Chanjin Chung

    (Department of Agricultural Economics, Oklahoma State University, 322 Agricultural Hall, Stillwater, Oklahoma 74078., E-mail: cchanji@okstate.edu)

  • Harry M. Kaiser

    (Department of Applied Economics and Management, Cornell University, 346 Warren Hall, Ithaca, New York 14853. E-mail: hmk2@cornell.edu)

Abstract

This study provides a theoretical background for the firm-level analysis on the distributional effects of commodity promotion programs. The conceptual basis of this approach is that firms differ due to differences in possessing endowments of fixed factors, and net returns to firms can be viewed as rents accruing to these factors. Therefore, the marginal return from an increase in demand due to a successful generic promotion programs may not be the same across firms because firms do not have the same level of fixed factors. The result of our analysis indicates that producers may not equally benefit from the collectively funded programs. Our marginal profit analysis indicates that a producer-financed promotion program may have greater benefits for producers with more endowed fixed factors than those with less endowed fixed factors.[EconLit citations: M370 and Q130]. © 2003 Wiley Periodicals, Inc. Agribusiness 19: 325-332, 2003.

Suggested Citation

  • Chanjin Chung & Harry M. Kaiser, 2003. "Distributional effects of commodity promotion programs by type of producer," Agribusiness, John Wiley & Sons, Ltd., vol. 19(3), pages 325-332.
    • Handle: RePEc:wly:agribz:v:19:y:2003:i:3:p:325-332
    DOI: 10.1002/agr.10062
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    References listed on IDEAS

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    1. Chung, Chanjin & Kaiser, Harry M., 2000. "Do Farmers Get An Equal Bang For Their Buck From Generic Advertising Programs? A Theroetical And Empirical Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(1), pages 1-12, July.
    2. Panzar, John C & Willig, Robert D, 1978. "On the Comparative Statics of a Competitive Industry with Inframarginal Firms," American Economic Review, American Economic Association, vol. 68(3), pages 474-478, June.
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