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New Varieties and the Returns to Commodity Promotion: Washington Fuji Apples

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  • Richards, Timothy J.
  • Patterson, Paul M.

Abstract

The Fuji apple variety is relatively new in the U.S. As a new product, questions concern the relative impact of consumer learning by experience, by variety-specific promotion, or by generic apple promotion. A two-stage (LES/LAIDS) model incorporating both types of promotion is used to estimate the effect of generic and variety specific promotion, as well as consumer experience, on the demand for Fuji apples. Estimates show each to have a positive impact, and also show new or specialty apple varieties to be relatively price inelastic, but income elastic. Grower returns to promotion are calculated with an equilibrium displacement model of price changes and producer surplus. Changes in producer surplus provide a base-scenario benefit:cost ratio of 14.73. Keywords: apple demand, experience, LAIDS, new products, producer surplus, promotion, varieties.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:asumwp:28541
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    References listed on IDEAS

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    Cited by:

    1. Richards, Timothy J. & Padilla, Luis, 2001. "Commodity R&D, Patenting, And Promotion," 2001 Annual meeting, August 5-8, Chicago, IL 20497, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Govindasamy, Ramu & Sullivan, Kevin P. & Puduri, Venkata S. & Schilling, Brian J. & Brown, Logan, 2005. "Consumer Awareness of the Jersey Fresh Promotional Program," P Series 36729, Rutgers University, Department of Agricultural, Food and Resource Economics.
    3. Richards, Timothy J. & Padilla, Luis, 2002. "Commodity R&D And Promotion," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(03), December.
    4. Govindasamy, Ramu & Schilling, Brian J. & Sullivan, Kevin P. & Turvey, Calum G. & Brown, Logan & Puduri, Venkata S., 2004. "Returns to the Jersey Fresh Promotional Program: The Impacts of Promotional Expenditures on Farm Cash Receipts in New Jersey," P Series 36728, Rutgers University, Department of Agricultural, Food and Resource Economics.

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