IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v7y1991i2p165-173.html
   My bibliography  Save this article

Economic effects of an advertising excise tax

Author

Listed:
  • Hui-Shung Chang

    (Department of Agricultural Economics and Rural Sociology, Auburn University)

  • Henry W. Kinnucan

    (Department of Agricultural Economics and Rural Sociology, Auburn University)

Abstract

Graphical analysis is used to demonstrate the effects of an advertising excise tax on price, output, and welfare. Results indicate the costs of advertising check-off programs in general are not borne entirely by producers but rather are passed on in part to consumers in the form of higher retail prices. Consequently, (a) estimates of producers' returns to advertising that ignore the incidence of the advertising tax will be understated, (b) the ability to shift the advertising tax gives producers an added incentive to support check-off programs, and (c) because advertising check-off programs affect consumer as well as producer surplus (i.e., have social welfare implications) government oversight is warranted.

Suggested Citation

  • Hui-Shung Chang & Henry W. Kinnucan, 1991. "Economic effects of an advertising excise tax," Agribusiness, John Wiley & Sons, Ltd., vol. 7(2), pages 165-173.
    • Handle: RePEc:wly:agribz:v:7:y:1991:i:2:p:165-173
    DOI: 10.1002/1520-6297(199103)7:2<165::AID-AGR2720070207>3.0.CO;2-I
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Nicholas Kaldor, 1950. "The Economic Aspects of Advertising," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 18(1), pages 1-27.
    2. Lester G. Telser, 1964. "Advertising and Competition," Journal of Political Economy, University of Chicago Press, vol. 72, pages 537-537.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Henry W. Kinnucan & Yuliang Miao, 1999. "Media-specific returns to generic advertising: The case of catfish," Agribusiness, John Wiley & Sons, Ltd., vol. 15(1), pages 81-99.
    2. Dong, Diansheng & Schmit, Todd M. & Kaiser, Harry M., 2007. "Optimal Media Allocation of Generic Fluid Milk Advertising Expenditures: The Case of New York State," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(2), pages 253-266, October.
    3. Kinnucan, Henry W., 1999. "Advertising Traded Goods," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(1), pages 1-19, July.
    4. Kinnucan, Henry W. & Christian, Jason E., 1997. "A Method For Measuring Returns To Nonprice Export Promotion With Application To Almonds," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(1), pages 1-13, July.
    5. Henry W. Kinnucan & Øystein Myrland, 2002. "The Relative Impact of the Norway‐EU Salmon Agreement: a Mid‐term Assessment," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 195-219, July.
    6. Williams, Gary W. & Capps Jr., Oral, 2020. "Generic promotion of Norwegian seafood exports," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 23(3), August.
    7. Reberte, J. Carlos & Schmit, Todd M. & Kaiser, Harry M., 1996. "An Ex Post Evaluation of Generic Egg Advertising in the U.S," Research Bulletins 122835, Cornell University, Department of Applied Economics and Management.
    8. Henry W. Kinnucan & Maria Thomas, 1997. "Optimal Media Allocation Decisions For Generic Advertisers," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 425-441, January.
    9. Cranfield, John A.L., 2002. "Optimal Advertising With Traded Raw And Final Goods: The Case Of Variable Proportions Technology," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(1), pages 1-18, July.
    10. Strak, John, 1998. "The Effectiveness Of Mlc'S Beef Promotion During The Bse Crisis," Journal of Food Distribution Research, Food Distribution Research Society, vol. 29(1), pages 1-6, February.
    11. Williams, Gary W. & Capps, Jr., Oral, 2022. "The apparent conflict of Norwegian pelagic fisheries management and Norwegian seafood council export promotion," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(3), February.
    12. Henry W. Kinnucan & Øystein Myrland, 2001. "A note on measuring returns to nonprice export promotion," Agribusiness, John Wiley & Sons, Ltd., vol. 17(3), pages 423-433.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Shinn-Shyr & Stiegert, Kyle W., 2006. "The Duopolistic Firm with Endogenous Risk Control: Case of Persuasive Advertising and Product Differentiation," Staff Paper Series 496, University of Wisconsin, Agricultural and Applied Economics.
    2. ÖRS, Evren, 2006. "The Role of Advertising in Commercial Banking," CEPR Discussion Papers 5461, C.E.P.R. Discussion Papers.
    3. Daniel Orr, 1987. "Notes on the mass media as an economic institution," Public Choice, Springer, vol. 53(1), pages 79-95, January.
    4. Marco A. Haan & José L. Moraga‐González, 2011. "Advertising for Attention in a Consumer Search Model," Economic Journal, Royal Economic Society, vol. 121(552), pages 552-579, May.
    5. Carlos E. Carpio & Olga Isengildina-Massa, 2016. "Does Government-sponsored Advertising Increase Social Welfare? A Theoretical and Empirical Investigation," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(2), pages 239-259.
    6. Subhadip Chakrabarti & Hans Haller, 2011. "An Analysis Of Advertising Wars," Manchester School, University of Manchester, vol. 79(1), pages 100-124, January.
    7. Jean Samuel Beuscart & Kevin Mellet, 2008. "Business Models of the Web 2.0: Advertising or The Tale of Two Stories," Post-Print hal-03459866, HAL.
    8. Serafin Grundl & You Suk Kim, 2019. "Consumer mistakes and advertising: The case of mortgage refinancing," Quantitative Marketing and Economics (QME), Springer, vol. 17(2), pages 161-213, June.
    9. Hamilton, Stephen F. & Richards, Timothy J. & Stiegert, Kyle W., 2009. "How Does Advertising Affect Market Performance? The Case of Generic Advertising," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49187, Agricultural and Applied Economics Association.
    10. Wang, Shinn-Shyr & Stiegert, Kyle W., 2006. "The Duopolistic Firm with Endogenous Risk Control: Case of Persuasive Advertising and Product Differentiation," Staff Papers 12606, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    11. Serafin J. Grundl & You Suk Kim, 2017. "Consumer Mistakes and Advertising : The Case of Mortgage Refinancing," Finance and Economics Discussion Series 2017-067, Board of Governors of the Federal Reserve System (U.S.).
    12. repec:hal:spmain:info:hdl:2441/1u4ael0gba89u9tc82qa554gij is not listed on IDEAS
    13. Régis Chenavaz & Sajjad M. Jasimuddin, 2017. "An analytical model of the relationship between product quality and advertising," Post-Print hal-01685892, HAL.
    14. Konishi, Hideo & Sandfort, Michael T., 2002. "Expanding demand through price advertisement," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 965-994, September.
    15. Duncan Simester & Yu (Jeffrey) Hu & Erik Brynjolfsson & Eric T. Anderson, 2009. "Dynamics Of Retail Advertising: Evidence From A Field Experiment," Economic Inquiry, Western Economic Association International, vol. 47(3), pages 482-499, July.
    16. Olivier Gossner & Jakub Steiner & Colin Stewart, 2021. "Attention Please!," Econometrica, Econometric Society, vol. 89(4), pages 1717-1751, July.
    17. David Genesove & Avi Simhon, 2015. "Seasonality and the Effect of Advertising on Price," Journal of Industrial Economics, Wiley Blackwell, vol. 63(1), pages 199-222, March.
    18. Christian Jansen, 2003. "Convergence and the Potential Ban on Interactive Product Placement in Germany," Law and Economics 0302002, University Library of Munich, Germany.
    19. Yuxin Chen & Yogesh V. Joshi & Jagmohan S. Raju & Z. John Zhang, 2009. "A Theory of Combative Advertising," Marketing Science, INFORMS, vol. 28(1), pages 1-19, 01-02.
    20. Jean Samuel Beuscart & Kevin Mellet, 2008. "Business Models of the Web 2.0: Advertising or The Tale of Two Stories," Sciences Po publications info:hdl:2441/1u4ael0gba8, Sciences Po.
    21. Ulrich Doraszelski & Sarit Markovich, 2007. "Advertising dynamics and competitive advantage," RAND Journal of Economics, RAND Corporation, vol. 38(3), pages 557-592, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:7:y:1991:i:2:p:165-173. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.