Skip to main content Accessibility help
×
Home

Optimal Seasonal Allocation of Generic Dairy Advertising Expenditures

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

Abstract

Annual seasonal advertising expenditure allocations were estimated for the national generic advertising programs for fluid milk and cheese with the use of price and advertising elasticities of demand that varied over time. Significant variation in optimal allocations existed both across products and over time, emphasizing the importance of obtaining accurate seasonal forecasts that incorporate changes in market conditions to plan future spending allocations. In the absence of such information, allocating annual budgets equally across quarters still produced positive producer welfare gains on average relative to historical spending that were not statistically different from those realized under the optimal spending strategy.

Copyright

References

Hide All
Blisard, N., Blayney, D., Chandran, R., and Allshouse, J.. Analyses of Generic Dairy Advertising, 1984-1997. Washington, DC: U. S. Department of Agriculture, Economic Research Service, Technical Bulletin 1873, 1999.
Capps, O. Jr, and Schmitz, J.D.. “Effect of Generic Advertising on the Demand for Fluid Milk: The Case of the Texas Order.” Southern Journal of Agricultural Economics 23(December 1991):131–40.
Chung, C, and Kaiser, H.M.. “Determinants of Temporal Variations in Generic Advertising Effectiveness.” Agribusiness 16(Spring 2000):194214.
Cox, T.L.A Rotterdam Model Incorporating Advertising Effects: The Case of Canadian Fats and Oils.” Commodity Advertising and Promotion. Kinnucan, H.W., Thompson, S.R. and Chang, H.-S., eds. Ames, IA: Iowa State University Press, 1992.
DMI (Dairy Management, Inc.). Personal communication. Rosemont, IL, 2002.
Dorfman, R., and Steiner, P.O.. “Optimal Advertising and Optimal Quality.” The American Economic Review 44(December 1954):826–36.
Greene, W.H.Econometric Analysis, 3rd ed. Upper Saddle River, NJ: Prentice-Hall, 1997.
Kaiser, H.M.Impact of National Dairy Advertising on Dairy Markets, 1984-95.” Journal of Agricultural and Applied Economics 29(December 1997):303–14.
Kinnucan, H.W., and Forker, O.D.. “Seasonality in the Consumer Response to Milk Advertising with Implications for Milk Promotion Policy.” American Journal of Agricultural Economics 68(August 1986):562–71.
Kinnucan, H.W., and Myrland, O.. “Optimal Seasonal Allocation of Generic Advertising Expenditures with Product Substitution: Salmon in France.Marine Resource Economics 17(2002):103–20.
Liu, D.J., and Forker, O.D.. “Optimal Control of Generic Fluid Milk Advertising Expenditures.” American Journal of Agricultural Economics 72(November 1990):1047–55.
Nerlove, M., and Arrow, K.J.. “Optimal Advertising Policy Under Dynamic Conditions.” Economica 29(May 1962):129–42.
Schmit, T.M., and Kaiser, H.M.. “Measuring the Impacts of Generic Fluid Milk and Cheese Advertising: A Time-Varying Parameter Application.” Research Bulletin 2002-06, Dept. of Applied Economics and Management, Cornell University, 2002.
Schmit, T.M., “Decomposing the Variation in Generic Advertising Response Over Time.” American Journal of Agricultural Economics 86(February 2004):139–53.
Sun, T.Y., Blisard, N., and Blaylock, J.R.. An Evaluation of Fluid Milk and Cheese Advertising, 1978-1993. Washington, DC: U. S. Department of Agriculture, Economic Research Service, Technical Bulletin 1848, 1995.
U.S. Department of Agriculture. Livestock, Dairy, and Poultry Outlook. Washington DC: Economic Research Service, selected issues, 1997-2002.
U.S. Department of Agriculture. Report to Congress on the National Dairy Promotion and Research Program and the National Fluid Milk Processor Promotion Program. Washington, DC: Agricultural Marketing Service, July 2003.
Vande Kamp, P.R., and Kaiser, H.M.. “Irreversibility in Advertising—Demand Response Functions: An Application to Milk.” American Journal of Agricultural Economics 81(May 1999):385–96.
Vande Kamp, P.R., “Optimal Temporal Policies in Fluid Milk Advertising.” American Journal of Agricultural Economics 82(May 2000):274–86.

Keywords

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed