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Identifying The Effects Of Generic Advertising On The Household Demand For Fluid Milk And Cheese: A Two-Step Panel Data Approach

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  • Schmit, Todd M.
  • Dong, Diansheng
  • Chung, Chanjin
  • Kaiser, Harry M.
  • Gould, Brian W.

Abstract

A two-step model with sample selection is applied to panel data of U.S. households to estimate at-home demand for fluid milk and cheese, incorporating advertising expenditures. The model consistently accounts for sample-selection bias, unobserved household heterogeneity, and temporal correlation. Generic advertising programs for fluid milk and cheese were effective at increasing conditional purchase quantities, with very little effect on the probability of purchase. In contrast to aggregate studies, the long-run generic advertising elasticities for cheese were larger than for those of fluid milk. Advertising response varied considerably across sub-product classes, while branded advertising expenditures were largely insignificant.

Suggested Citation

  • Schmit, Todd M. & Dong, Diansheng & Chung, Chanjin & Kaiser, Harry M. & Gould, Brian W., 2002. "Identifying The Effects Of Generic Advertising On The Household Demand For Fluid Milk And Cheese: A Two-Step Panel Data Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(01), July.
  • Handle: RePEc:ags:jlaare:31088
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    References listed on IDEAS

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    1. Ward, Ronald W. & Moon, Wanki & Medina, Sara, 2001. "Measuring The Impact Of Generic Promotions Of U.S. Beef: An Application Of Double-Hurdle And Time Series Models," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 4(04).
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    4. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    5. Gould, Brian W. & Dong, Diansheng, 2000. "The Decision Of When To Buy A Frequently Purchased Good: A Multi-Period Probit Model," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(02), December.
    6. Liu, Donald J. & Kaiser, Harry M. & Forker, Olan D. & Mount, Timothy D., 1990. "An Economic Analysis Of The U.S. Generic Dairy Advertising Program Using An Industry Model," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 19(1), April.
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    8. Diansheng Dong & J.S. Shonkwiler & Oral Capps, 1998. "Estimation of Demand Functions Using Cross-Sectional Household Data: The Problem Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 466-473.
    9. John Lenz & Harry M. Kaiser & Chanjin Chung, 1998. "Economic analysis of generic milk advertising impacts on markets in New York State," Agribusiness, John Wiley & Sons, Ltd., vol. 14(1), pages 73-83.
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    Cited by:

    1. House, Lisa A. & Jiang, Yuan & Salois, Matthew, 2014. "Measures of Online Advertising Effectiveness: The Case of Orange Juice," 2014 AAEA/EAAE/CAES Joint Symposium: Social Networks, Social Media and the Economics of Food, May 29-30, 2014, Montreal, Canada 169776, Agricultural and Applied Economics Association;Canadian Agricultural Economics Society;European Association of Agricultural Economists.
    2. Gulgun Yildiz Tiryaki & Cuma Akbay, 2010. "Consumers’ fluid milk consumption behaviors in TURKEY: an application of multinomial logit model," Quality & Quantity: International Journal of Methodology, Springer, vol. 44(1), pages 87-98, January.
    3. Key, Nigel D. & Sneeringer, Stacy & Marquardt, David, 2014. "Climate Change, Heat Stress, and U.S. Dairy Production," Economic Research Report 186731, United States Department of Agriculture, Economic Research Service.
    4. Schmit, Todd M. & Chung, Chanjin & Kaiser, Harry M., 2006. "The Dairy Case Management Program: Does It Mooove More Milk?," Choices, Agricultural and Applied Economics Association, vol. 21(2).
    5. Biing-Hwan Lin & Steven T. Yen & Diansheng Dong & David M. Smallwood, 2010. "Economic Incentives For Dietary Improvement Among Food Stamp Recipients," Contemporary Economic Policy, Western Economic Association International, vol. 28(4), pages 524-536, October.
    6. Davis, Christopher G. & Blayney, Donald P. & Cooper, Joseph C. & Yen, Steven T., 2009. "An Analysis of Demand Elasticities for Fluid Milk Products in the U.S," 2009 Conference, August 16-22, 2009, Beijing, China 51791, International Association of Agricultural Economists.
    7. Stewart, Hayden & Dong, Diansheng & Carlson, Andrea, 2012. "Is Generational Change Contributing to the Decline in Fluid Milk Consumption?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(3), December.
    8. 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.
    9. Pedro A. Alviola & Oral Capps, 2010. "Household demand analysis of organic and conventional fluid milk in the United States based on the 2004 Nielsen Homescan panel," Agribusiness, John Wiley & Sons, Ltd., vol. 26(3), pages 369-388.
    10. Lisa A. House & Yuan Jiang & Matthew Salois, 2015. "Measures of Online Advertising Effectiveness for Market Penetration: The Case of Orange Juice Consumers," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(4), pages 435-448, December.
    11. Steven T. Yen & Biing-Hwan Lin & David M. Smallwood & Margaret Andrews, 2004. "Demand for nonalcoholic beverages: The case of low-income households," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 309-321.
    12. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Yen, Steven T. & Stillman, Richard, 2012. "U.S. Fluid Milk Demand: A Disaggregated Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 15(1).
    13. Bouhlal, Yasser & Capps, Oral, Jr. & Ishdorj, Ariun, 2013. "Estimating the Censored Demand for U.S. Cheese Varieties Using Panel Data: Impact of Economic and Demographic Factors," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151298, Agricultural and Applied Economics Association.
    14. Newton, John & Thraen, Cameron S. & Bozic, Marin, 2013. "Whither Dairy Policy? Evaluating Expected Government Outlays and Distributional Impacts of Alternative 2013 Farm Bill Dairy Title Proposals," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 153750, Agricultural and Applied Economics Association.
    15. Cuma Akbay & Gulgun Yildiz Tiryaki, 2008. "Unpacked and packed fluid milk consumption patterns and preferences in Turkey," Agricultural Economics, International Association of Agricultural Economists, vol. 38(1), pages 9-20, January.
    16. Cihat Günden & Abdulbaki Bilgic & Bülent Miran & Bahri Karli, 2011. "A censored system of demand analysis to unpacked and prepackaged milk consumption in Turkey," Quality & Quantity: International Journal of Methodology, Springer, vol. 45(6), pages 1273-1290, October.

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    Keywords

    Demand and Price Analysis; Marketing;

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