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Profitability Of Incremental Expenditure On Fibre Promotion

  • Hill, Debbie J.
  • Piggott, Roley R.
  • Griffith, Garry R.
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    In this paper the impact of changes in wool promotion expenditure and changes in expenditure on the promotion of competing fibres are examined using an equilibrium displacement model. The emphasis is on examining impacts on producer profits net of promotion expenditure and on benefit-cost ratios measuring changes in producer surplus relative to changes in promotion expenditure. It was found, for example, that incremental expenditure on apparel wool promotion on the domestic market is unprofitable but incremental expenditure on promotion of apparel wool on the export market is generally profitable. Further, it was found that increased promotion of cotton and man-made fibres on the export market, with promotion of apparel wool unchanged, would reduce profits to apparel wool producers. Finally, a case is made for improved data availability in order to allow more comprehensive ex-ante and ex-post evaluations of promotion programs, thereby increasing the intensity of scrutiny of promotion programs to a level more in line with that for investment in rural research and development.

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    File URL: http://purl.umn.edu/22370
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    Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.

    Volume (Year): 40 (1996)
    Issue (Month): 03 (December)
    Pages:

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    Handle: RePEc:ags:ajaeau:22370
    Contact details of provider: Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
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    1. Schrimper, Ronald A., 1977. "Comments On Tisdell'S Critique Of Nerlove-Waugh Theorem Concerning Optimal Advertising," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(04), December.
    2. Scobie, Grant M. & Mullen, John D. & Alston, Julian M., 1991. "The Returns To Investment In Research On Australian Wool Production," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(02), August.
    3. Solomon, H. & Kinnucan, Henry W., 1993. "Effects Of Non-Price Export Promotion: Some Evidence For Cotton," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 37(01), April.
    4. Quilkey, John J., 1986. "Promotion Of Primary Products - A View From The Cloister," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 30(01), April.
    5. Piggott, Roley R., 1992. "Some Old Truths Revisited," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(02), August.
    6. Mues, Colin & Simmons, Phil, 1988. "The Effects of US Farm Policy on Australian Cotton Revenues," 1988 Conference (32nd), February 8-11, 1988, Melbourne, Australia 144045, Australian Agricultural and Resource Economics Society.
    7. Tisdell, Clement A., 1976. "The Promotion Of Wool And Synthetic Fibre Blends: Some Alternative Strategies For The Wool Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 44(03), September.
    8. Piggott, Roley R., 1992. "Some Old Truths Revisited," 1992 Conference (36th), February 10-13, 1992, Canberra, Australia 147251, Australian Agricultural and Resource Economics Society.
    9. Lewis, Jack Neville & Bereza, S., 1977. "The Promotion Of Wool-Synthetic Fibre Blends: A Comment," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(03), September.
    10. 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.
    11. Mullen, John D. & Alston, Julian M. & Wohlgenant, Michael K., 1989. "The Impact Of Farm And Processing Research On The Australian Wool Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 33(01), April.
    12. Lewis, Jack Neville, 1979. "Floor Prices and Wool Promotion: Some Further Hidden Costs?," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 47(02), August.
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