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Alternative Specifications of Advertising in the Rotterdam Model

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  • Brown, Mark G
  • Lee, Jonq-Ying

Abstract

This paper examines several approaches to introduce advertising in systems of demand equations. The Rotterdam model is used to analyse the effects of advertising in an unrestricted specification and three restricted specifications--advertising affects demand alternatively through (1) marginal utilities, as in studies by Duffy (1987, 1989, 1990) and Selvanathan (1989b); (2) scaling parameters which can be viewed as indicators of product quality, and (3) translation parameters which can be viewed as indicators of basic needs. A test to choose among the alternative specifications is provided and the methodology is applied to data on demand for fruit juice products. Copyright 1993 by Oxford University Press.

Suggested Citation

  • Brown, Mark G & Lee, Jonq-Ying, 1993. "Alternative Specifications of Advertising in the Rotterdam Model," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 20(4), pages 419-436.
  • Handle: RePEc:oup:erevae:v:20:y:1993:i:4:p:419-36
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    Cited by:

    1. Thomas Marsh & Ted Schroeder & James Mintert, 2004. "Impacts of meat product recalls on consumer demand in the USA," Applied Economics, Taylor & Francis Journals, vol. 36(9), pages 897-909.
    2. Xiao, Hui & Kinnucan, Henry W. & Kaiser, Harry M., 1998. "Advertising, Structural Change, and U.S. Non-Alcoholic Drink Demand," Research Bulletins 122688, Cornell University, Department of Applied Economics and Management.
    3. Gao, Zhifeng & Lee, Jonq-Ying & Brown, Mark G., 2009. "A study of the demand relationship between fixed-weight and random-weight citrus," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49466, Agricultural and Applied Economics Association.
    4. Lee, Jonq-Ying & Brown, Mark G. & Knight, Erika P. & Chung, Rebecca H., 2008. "The Impacts of Retail Promotions on the Demand for Orange Juice: A Study of a Retail Chain," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6699, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Mark G. Brown & Jonq-Ying Lee & Thomas H. Spreen, 1996. "The impact of generic advertising and the free rider problem: A look at the US orange juice market and imports," Agribusiness, John Wiley & Sons, Ltd., vol. 12(4), pages 309-316.
    6. Dengjun Zhang, 2015. "The trade effect of price risk: a system-wide approach," Empirical Economics, Springer, vol. 48(3), pages 1149-1167, May.
    7. Silva, Andres & Garcia, Marian & Bailey, Alastair, 2012. "The Impact of Child Obesity News on Household Food Expenditure in the United Kingdom," 2012 AAEA/EAAE Food Environment Symposium, May 30-31, Boston, MA 123526, Agricultural and Applied Economics Association.
    8. Brown, Mark G. & Spreen, Thomas H. & Muraro, Ronald P., 1999. "Fresh Versus Processed Utilization Of Florida Grapefruit," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(3), November.
    9. Coulibaly, Nouhoun & Brorsen, B. Wade, 1998. "Resolving The Conflicts Between Previous Meat Generic Advertising Studies," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20897, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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