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New Varieties and the Returns to Commodity Promotion: Washington Fuji Apples

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Author Info
Richards, Timothy J.
Patterson, Paul M.
Abstract

The Fuji apple variety is relatively new in the U.S. As a new product, questions concern the relative impact of consumer learning by experience, by variety-specific promotion, or by generic apple promotion. A two-stage (LES/LAIDS) model incorporating both types of promotion is used to estimate the effect of generic and variety specific promotion, as well as consumer experience, on the demand for Fuji apples. Estimates show each to have a positive impact, and also show new or specialty apple varieties to be relatively price inelastic, but income elastic. Grower returns to promotion are calculated with an equilibrium displacement model of price changes and producer surplus. Changes in producer surplus provide a base-scenario benefit:cost ratio of 14.73. Keywords: apple demand, experience, LAIDS, new products, producer surplus, promotion, varieties.

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Paper provided by Arizona State University, Morrison School of Agribusiness and Resource Management in its series Working Papers with number 28541.

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Date of creation: 1998
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Handle: RePEc:ags:asumwp:28541

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Related research
Keywords: apple demand; experience; LAIDS; new products; producer surplus; promotion; varieties.; Marketing;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Baye, Michael R & Jansen, Dennis W & Lee, Jae-Woo, 1992. "Advertising Effects in Complete Demand Systems," Applied Economics, Taylor and Francis Journals, vol. 24(10), pages 1087-96, October.
  2. Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-51, November. [Downloadable!] (restricted)
  3. McFadden, Daniel L & Train, Kenneth E, 1996. "Consumers' Evaluation of New Products: Learning from Self and Others," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 683-703, August. [Downloadable!] (restricted)
  4. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug.. [Downloadable!] (restricted)
  5. Ehrlich, Isaac & Fisher, Lawrence, 1982. "The Derived Demand for Advertising: A Theoretical and Empirical Investigation," American Economic Review, American Economic Association, vol. 72(3), pages 366-88, June. [Downloadable!] (restricted)
  6. Sorger, Gerhard, 1989. "Competitive dynamic advertising : A modification of the Case game," Journal of Economic Dynamics and Control, Elsevier, vol. 13(1), pages 55-80, January. [Downloadable!] (restricted)
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  1. Govindasamy, Ramu & Sullivan, Kevin & Puduri, Venkata S. & Schilling, Brian & Brown, Logan, 2005. "Consumer Awareness of the Jersey Fresh Promotional Program," P Series 36729, Rutgers University, Department of Agricultural, Food and Resource Economics. [Downloadable!]
  2. Govindasamy, Ramu & Schilling, Brian & Sullivan, Kevin & Turvey, Calum & Brown, Logan & Puduri, Venkata, 2004. "Returns to the Jersey Fresh Promotional Program: The Impacts of Promotional Expenditures on Farm Cash Receipts in New Jersey," P Series 36728, Rutgers University, Department of Agricultural, Food and Resource Economics. [Downloadable!]
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