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Dynamic Model of Fresh Fruit Promotion: A Household Production Approach

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  • Timothy J. Richards

Abstract

Many studies consider the dynamic effects of commodity promotion on demand, but few derive the theoretical basis for these effects in a model of optimal consumer behavior. This study develops a dynamic household production model of U.S. fresh fruit consumption, which it uses to evaluate the effectiveness of advertising and promotion expenditures by the Washington Apple Commission. Estimates from a dynamic-dual Generalized Leontief system show direct advertising to be marginally more effective than retail promotion in increasing apple sales, but advertising has positive spillover effects to sales of other fruits, whereas promotion reduces sales of competing products. Copyright 1999, Oxford University Press.

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  • Timothy J. Richards, 1999. "Dynamic Model of Fresh Fruit Promotion: A Household Production Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 195-211.
  • Handle: RePEc:oup:ajagec:v:81:y:1999:i:1:p:195-211
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    File URL: http://hdl.handle.net/10.2307/1244460
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    Cited by:

    1. Richards, Timothy J. & Patterson, Paul M., 2003. "A Bilateral Comparison Of Fruit And Vegetable Consumption: U.S And Canada," 2003 Annual meeting, July 27-30, Montreal, Canada 21891, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Richards, Timothy J. & Patterson, Paul M., 1999. "The Economic Value Of Public Relations Expenditures: Food Safety And The Strawberry Case," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(02), December.

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