Excise Taxes And Commodity Promotion: Bayesian Retrieval Of The Optimum
This article shows how the solution to the promotion problem--Â—the problem of locating the optimal level of advertising in a downstream market--Â—can be derived simply, empirically, and robustly through the application of some simple calculus and Bayesian econometrics. We derive the complete distribution of the level of promotion that maximizes producer surplus and generate recommendations about patterns as well as levels of expenditure that increase net returns. The theory and methods are applied to quarterly series (1978:2S1988:4) on red meats promotion by the Australian Meat and Live-Stock Corporation. A slightly different pattern of expenditure would have profited lamb producers.
Volume (Year): 18 (2000)
Issue (Month): 2 ()
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- DREZE, Jacques H. & RICHARD, Jean-François, .
"Bayesian analysis of siultaneous equation systems,"
CORE Discussion Papers RP
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- Kinnucan, Henry W. & Chang, Hui-Shung (Christie) & Venkateswaran, Meenakshi, 1993. "Generic Advertising Wearout," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(03), December.
- Chib, Siddhartha, 1992. "Bayes inference in the Tobit censored regression model," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 79-99.
- Holloway, Garth J., 1998. "Excise Taxes and Commodity Promotion: A Diagrammatic Motivation," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 16(2).
- 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.
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