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Price and Quantity Effects of Canada's Dairy Advertising Programs

Published online by Cambridge University Press:  15 September 2016

Henry W. Kinnucan  and
Evelyn T. Belleza
Henry W. Kinnucan
Affiliation:
Department of Agricultural Economics and Rural Sociology, Auburn University, Auburn, Alabama 36849–5604 USA
Evelyn T. Belleza
Affiliation:
Department of Agricultural Economics and Rural Sociology, Auburn University, Auburn, Alabama 36849–5604 USA
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Abstract

An equilibrium-displacement model is combined with econometric estimates of key model parameters to identify the impacts of Canada's dairy advertising programs on prices and quantity. Results suggest increased advertising of fluid milk enhances the farm value of milk but has minimal effect on government costs of the dairy price-support program. Owing to government intervention in the butter market, increased butter advertising has no effect on the farm value of milk, at least in the short run, but is highly effective at reducing government costs. Advertising is most effective, ceteris paribus, in markets where retail demand and wholesale supply for the specific dairy product are relatively price inelastic.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 24 , Issue 2 , October 1995 , pp. 199 - 210
Copyright
Copyright © 1995 Northeastern Agricultural and Resource Economics Association 

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