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The Demand for Canadian Fats and Oils: A Case Study of Advertising Effectiveness

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  • Ellen W. Goddard
  • Alex K. Amuah

Abstract

The fats and oils market in Canada is characterized by generic (butter) and brand (margarine, shortening, vegetable oils) advertising. In this study the economic interrelationships in the consumption of fats and oils are examined and the effectiveness of the advertising programs is evaluated. The two-stage demand model used is made up of a single equation determining Canadian aggregate expenditure on fats and oils and an expenditure share system derived from a translog indirect utility function for each of four products; butter, margarine, shortening, and vegetable oils. The demand for individual fats and oils is significantly affected by lagged advertising expenditure levels, habit persistence and a time trend, as well as the traditional variables of price and expenditure.

Suggested Citation

  • Ellen W. Goddard & Alex K. Amuah, 1989. "The Demand for Canadian Fats and Oils: A Case Study of Advertising Effectiveness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 741-749.
    • Handle: RePEc:oup:ajagec:v:71:y:1989:i:3:p:741-749.
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    1. Seo, Seong-Cheon & Capps, Oral, Jr., 1997. "Testing For Store-Level Differences In Factors Affecting Item Movement Of Prego And Ragu Spaghetti Sauces Using Point-Of-Sale Data," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(3), pages 1-12, October.
    2. Sartorius von Bach, Helmke, 1992. "Economic Aspects Of Advertising In Agriculture: A Review," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 31(1), March.
    3. Abbassi, Abdessalem & Larue, Bruno, 2011. "Trade liberalization and inter-provincial dumping in a spatial equilibrium model: the case of the Canadian dairy industry," MPRA Paper 30363, University Library of Munich, Germany.
    4. Kent D. Messer & Todd M. Schmit & Harry M. Kaiser, 2005. "Optimal Institutional Mechanisms for Funding Generic Advertising: An Experimental Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1046-1060.
    5. Abdessalem Abbassi & Olivier Bonroy & Jean‐Philippe Gervais, 2008. "Dairy Trade Liberalization Impacts in Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(3), pages 313-335, September.
    6. Kinnucan, Henry W. & Belleza, Evelyn T., 1995. "Price And Quantity Effects Of Canada'S Dairy Adverstising Programs," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(2), pages 1-12, October.
    7. Stavroula Malla & K. K. Klein & Taryn Presseau, 2020. "Have health claims affected demand for fats and meats in Canada?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(3), pages 271-287, September.
    8. Phaneuf, Daniel J., 1999. "A Dual Approach to Modeling Corner Solutions in Recreation Demand," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 85-105, January.
    9. Forker, Olan D. & Liu, Donald J., 1989. "Generic Dairy Promotion Economic Research: Past, Present, and Future," Staff Papers 197587, Cornell University, Department of Applied Economics and Management.
    10. Anderson Reynolds & Arlie McFaul & Ellen Goddard, 1991. "Testing for causality between advertising expenditures and canadian demand for cheese and butter," Agribusiness, John Wiley & Sons, Ltd., vol. 7(3), pages 197-202.
    11. 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, January.
    12. Siskos, Y. & Matsatsinis, N. F. & Baourakis, G., 2001. "Multicriteria analysis in agricultural marketing: The case of French olive oil market," European Journal of Operational Research, Elsevier, vol. 130(2), pages 315-331, April.
    13. Gould, Brian W. & Cox, Thomas L. & Perali, Frederico, 1989. "Determinants of the Demand for Food Fats and Oils: The Role of Demographic Variables and Government Donations," Staff Papers 200486, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    14. Richards, Timothy J. & Patterson, Paul M., 1998. "New Varieties and the Returns to Commodity Promotion: Washington Fuji Apples," Working Papers 28541, Arizona State University, Morrison School of Agribusiness and Resource Management.
    15. Capps, Oral & Seo, Seong-Cheon & Nichols, John P., 1997. "On the Estimation of Advertising Effects for Branded Products: An Application to Spaghetti Sauces," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 29(2), pages 291-302, December.
    16. Timothy J. Richards, 2000. "A discrete|continuous model of fruit promotion, advertising, and response segmentation," Agribusiness, John Wiley & Sons, Ltd., vol. 16(2), pages 179-196.
    17. Cavaggioni, Margherita & Goddard, Ellen & Funk, Thomas & Taylor, Daphne, 1994. "The Effect of Nutritional Information on Attitude and Consumption of Butter," Department of Agricultural Economics and Business 258816, University of Guelph.
    18. Stavroula Malla & K. K. Klein & Taryn Presseau, 2022. "Has the Demand for Fats and Meats in the United States been Affected by the Health Claim on Risk of Coronary Heart Disease Issued by the Food and Drug Administration?," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(2), pages 97-118, April.
    19. Meilke, Karl D. & Sarker, Rakhal & Le Roy, Danny G., 1996. "Analyzing The Potential For Increased Trade In Dairy Products: A Canadian Perspective," Proceedings of the 2nd Agricultural and Food Policy Systems Information Workshop, 1996: Understanding Canada\United States Dairy Disputes 16959, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    20. Lee, Jonq-Ying & Brown, Mark G., 1990. "Lag Structures in Commodity Advertising Research," 1990 Annual meeting, August 5-8, Vancouver, Canada 271019, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    21. Othman, Jamal B. & McIntosh, Christopher S. & Houston, Jack B., 1994. "Price Competition And Informational Product Differentiation Effectiveness: The Case Of Edible Vegetable Oils In The U.S," 1994 Annual Meeting, August 7-10, San Diego, California 271417, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    22. Yadavalli, Anita & Jones, Keithly, 2014. "Does media influence consumer demand? The case of lean finely textured beef in the United States," Food Policy, Elsevier, vol. 49(P1), pages 219-227.
    23. Henry W. Kinnucan & Cynda R. Clary, 1995. "Brand versus generic advertising: A conceptual framework with an application to cheese," Agribusiness, John Wiley & Sons, Ltd., vol. 11(4), pages 355-369.
    24. Chen, Kevin Z. & Weerahewa, Jeevika, 1998. "Regulation, Market Power, And Advertising Effectiveness," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), pages 1-9, October.
    25. Duffy, Randy & Goddard, Ellen, 1995. "The Benefits To Canadian Hog Producers Of Generic Vs. Brand Advertising Of Pork," Economic Analysis of Meat Promotion, June 2-3, 1995, Denver, Colorado 279614, Regional Research Projects > NECC-63: Research Committee on Commodity Promotion.

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