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Quantity versus quality effects of generic advertising: The case of Norwegian salmon

Author

Listed:
  • Øystein Myrland

    (Department of Economics and Management, University of Tromsø, Norway)

  • Diansheng Dong

    (Department of Applied Economics and Management, Cornell University, Ithaca, New York)

  • Harry M. Kaiser

    (Department of Applied Economics and Management, Cornell University, Ithaca, New York)

Abstract

In this article, a two-equation sample selection model is used to estimate a household demand function for salmon incorporating domestic generic advertising. The two-equation estimation procedure, based on purchase and unit value equations, allows us to handle heavily censored panel data for salmon purchases by Norwegian households and the quality effects simultaneously. Unit values of the aggregated salmon commodity calculated from the observed expenditures and quantities are hypothesized to represent the average quality of the purchased commodity. Advertising effects on both purchases and unit values are investigated. The model also allows us to separate the effects of conditional purchases and purchase probabilities. Results indicate that most (76%) of the advertising effect is through the change of nonpurchase occasions to purchase occasions, and that generic salmon advertising induces Norwegian households to spend more money on salmon. However, advertising causes households to select more expensive products rather than increasing their purchased quantities. [EconLit citations: D12, C24]. © 2007 Wiley Periodicals, Inc. Agribusiness 23: 85-100, 2007.

Suggested Citation

  • Øystein Myrland & Diansheng Dong & Harry M. Kaiser, 2007. "Quantity versus quality effects of generic advertising: The case of Norwegian salmon," Agribusiness, John Wiley & Sons, Ltd., vol. 23(1), pages 85-100.
    • Handle: RePEc:wly:agribz:v:23:y:2007:i:1:p:85-100
    DOI: 10.1002/agr.20108
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    References listed on IDEAS

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    2. Dong, Diansheng & Zheng, Yuqing & Stewart, Hayden, 2018. "Food Sales Taxes on Household Food Spending: Application of a Censored Cluster Model," 2018 Annual Meeting, August 5-7, Washington, D.C. 273829, Agricultural and Applied Economics Association.

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