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Economic analysis of generic milk advertising impacts on markets in New York State

Author

Listed:
  • John Lenz

    (Dept. of Agricultural Economics, 346 Warren Hall, Cornell University, Ithaca, NY 14853-7801)

  • Harry M. Kaiser

    (Dept. of Agricultural Economics, 346 Warren Hall, Cornell University, Ithaca, NY 14853-7801)

  • Chanjin Chung

    (Dept. of Agricultural Economics, 346 Warren Hall, Cornell University, Ithaca, NY 14853-7801)

Abstract

This article examines the responsiveness of fluid milk sales to generic milk advertising in New York City, Albany, Syracuse, Rochester, and Buffalo markets. Fluid milk demand equations for New York City, Albany, Syracuse, Rochester, and Buffalo are estimated with monthly data for the period from January 1986 through June 1995. The results indicate that generic milk advertising is positive and statistically significant at the 10% significance level in each market. The highest advertising elasticity is in the Buffalo market, while the lowest is in Albany. The results also indicate that blend prices in the two New York milk marketing orders increased by 5.94 and 8.05 cents per cwt due to advertising, on average; while farmers invested 3.89 and 4.87 cents per cwt (in 1986 dollars) in fluid milk advertising for each market. A major policy implication is that New York dairy farmers should consider some reallocation of advertising expenditures among markets. © 1998 John Wiley & Sons, Inc.

Suggested Citation

  • John Lenz & Harry M. Kaiser & Chanjin Chung, 1998. "Economic analysis of generic milk advertising impacts on markets in New York State," Agribusiness, John Wiley & Sons, Ltd., vol. 14(1), pages 73-83.
    • Handle: RePEc:wly:agribz:v:14:y:1998:i:1:p:73-83
    DOI: 10.1002/(SICI)1520-6297(199801/02)14:1<73::AID-AGR7>3.0.CO;2-I
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    References listed on IDEAS

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    1. Henry Kinnucan & Olan D. Forker, 1986. "Seasonality in the Consumer Response to Milk Advertising with Implications for Milk Promotion Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 562-571.
    2. Stanley R. Thompson & Doyle A. Eiler, 1975. "Producer Returns from Increased Milk Advertising," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(3), pages 505-508.
    3. Kinnucan, Henry W., 1986. "Demographic Versus Media Advertising Effects On Milk Demand: The Case Of The New York City Market," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(1), pages 1-9, April.
    4. Donald J. Liu & Olan D. Forker, 1990. "Optimal Control of Generic Fluid Milk Advertising Expenditures," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(4), pages 1047-1055.
    5. Kaiser, Harry M., 1997. "Impact Of National Generic Dairy Advertising On Dairy Markets, 1984-95," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(2), pages 1-11, December.
    6. Thompson, Stanley R., 1974. "Sales Response To Generic Promotion Efforts And Some Implications Of Milk Advertising On Economic Surplus," Journal of the Northeastern Agricultural Economics Council, Northeastern Agricultural and Resource Economics Association, vol. 3(2), pages 1-14, October.
    7. Thompson, Stanley R., 1974. "Sales Response To Generic Promotion Efforts And Some Implications Of Milk Advertising On Economic Surplus," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 2), pages 1-14, October.
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    Cited by:

    1. John M. Crespi, 2003. "The Generic Advertising Controversy: How Did We Get Here and Where Are We Going?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 294-315.
    2. Beach, Robert H. & Murray, Brian C. & Piggott, Nicholas E. & Wohlgenant, Michael K., 2002. "Interaction Effects Of Promotion, Research, And Price Support Programs For U.S. Cotton," 2002 Annual meeting, July 28-31, Long Beach, CA 19803, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Kaiser, Harry M., 2000. "Impact of Generic Fluid Milk and Cheese Advertising on Dairy Markets," Research Bulletins 122670, Cornell University, Department of Applied Economics and Management.
    4. Kaiser, Harry M., 1999. "Impact of Generic Fluid Milk and Cheese Advertising on Dairy Markets, 1984-1998," Research Bulletins 122684, Cornell University, Department of Applied Economics and Management.
    5. Todd M. Schmit & Brian W. Gould & Diansheng Dong & Harry M. Kaiser & Chanjin Chung, 2003. "The Impact of Generic Advertising on U.S. Household Cheese Purchases: A Censored Autocorrelated Regression Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 51(1), pages 15-37, March.
    6. 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.
    7. Julian M. Alston & John M. Crespi & Harry M. Kaiser & Richard J. Sexton, 2007. "An Evaluation of California's Mandated Commodity Promotion Programs," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(1), pages 40-63.
    8. Schmit, Todd M. & Chung, Chanjin & Dong, Diansheng & Kaiser, Harry M. & Gould, Brian W., 2001. "Identifying the Extensive and Intensive Effects of Generic Advertising on the Household Demand for Fluid Milk and Cheese," Research Bulletins 122642, Cornell University, Department of Applied Economics and Management.
    9. Capps, O., . "Targeted Advertising and Promotion Campaigns_A Case Study of the National Pork Board," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 38(1).
    10. House, Lisa A. & Jiang, Yuan & Salois, Matthew, 2014. "Measures of Online Advertising Effectiveness: The Case of Orange Juice," 2014 AAEA/EAAE/CAES Joint Symposium: Social Networks, Social Media and the Economics of Food, May 29-30, 2014, Montreal, Canada 169776, Agricultural and Applied Economics Association.
    11. Schmit, Todd M. & Dong, Diansheng & Chung, Chanjin & Kaiser, Harry M. & Gould, Brian W., 2002. "Identifying The Effects Of Generic Advertising On The Household Demand For Fluid Milk And Cheese: A Two-Step Panel Data Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(1), pages 1-22, July.
    12. Xuqi Chen & Yan Heng & Zhifeng Gao & Yuan Jiang, 2022. "Impacts of duo‐regional generic advertising of social media on consumer preference," Agribusiness, John Wiley & Sons, Ltd., vol. 38(1), pages 21-44, January.
    13. Schmit, Todd M. & Chung, Chanjin & Dong, Diansheng & Kaiser, Harry M. & Gould, Brian W., 2000. "The Effect Of Generic Dairy Advertising On The Household Demand For Milk And Cheese," 2000 Annual meeting, July 30-August 2, Tampa, FL 21775, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Chung, Chanjin & Kaiser, Harry M., 1998. "Determinants of Temporal Variations in Advertising Effectiveness," Research Bulletins 122689, Cornell University, Department of Applied Economics and Management.
    15. Lisa A. House & Yuan Jiang & Matthew Salois, 2015. "Measures of Online Advertising Effectiveness for Market Penetration: The Case of Orange Juice Consumers," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(4), pages 435-448, December.
    16. Shew, Aaron M. & Nalley, Lawton L. & Durand-Morat, Alvaro & Meredith, Kylie & Parajuli, Ranjan & Thoma, Greg & Henry, Christopher G., 2021. "Holistically valuing public investments in agricultural water conservation," Agricultural Water Management, Elsevier, vol. 252(C).
    17. Chanjin Chung & Harry M. Kaiser, 1999. "Measurement of advertising effectiveness using alternative measures of advertising exposure," Agribusiness, John Wiley & Sons, Ltd., vol. 15(4), pages 525-537.

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