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Egg Advertising, Dietary Cholesterol Concerns, and U.S. Consumer Demand

  • Todd M. Schmit (a1) and Harry M. Kaiser (a1)

Abstract

A model of the domestic demand for eggs was estimated from quarterly data over the period 1987 through 1995, incorporating an index of consumer dietary cholesterol concerns and generic advertising efforts by the American Egg Board and the California Egg Commission. Empirical results indicated that most of the observed change in egg demand could be explained by dietary cholesterol concerns. Simulating the model in a constant elasticity supply framework demonstrated that advertising efforts over the past several years have resulted in net benefits to egg producers largely when considering inelastic supply responses. However, considering trade bias reduces these benefit-cost ratios substantially.

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