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How Does Advertising Affect Market Performance? The Case of Generic Advertising

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  • Hamilton, Stephen F.
  • Richards, Timothy J.
  • Stiegert, Kyle W.

Abstract

In this paper, we propose a novel approach to estimating the effect of advertising on market performance that relies on the revealed preferences of firms participating in generic advertising programs. Generic advertising campaigns provide a unique window to observe advertising effects on market performance, because rotations in market demand systematically redistribute advertising rents among firms according to observable characteristics on producer size. We examine producer attitudes towards generic advertising in the ”Beef. It’s What’s for Dinner” campaign of the U.S. Beef Checkoff program, the subject of the recent and controversial Supreme Court ruling on generic advertising as a form of government speech. We find the likelihood producers favor an expansion of the advertising program increases in their operating scale. This finding is consistent with an advertising campaign that has led to a counterclockwise rotation of market demand and a commensurate increase in market performance in the U.S. Beef market.

Suggested Citation

  • Hamilton, Stephen F. & Richards, Timothy J. & Stiegert, Kyle W., 2010. "How Does Advertising Affect Market Performance? The Case of Generic Advertising," Working Papers 201440, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    • Handle: RePEc:ags:uwfswp:201440
    DOI: 10.22004/ag.econ.201440
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    1. Dr. Makarand Upadhyaya, 2015. "The Impact of Humorous Television Advertisement in Customer Opinion in Bahrain," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 6(3), pages 20-25, September.

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    More about this item

    Keywords

    Agribusiness; Demand and Price Analysis;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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