Beggar-Thy-Self Advertising: A Multi-Market Model of Generic Promotion for Dairy Products

We develop a multi-market equilibrium displacement model that allows for demand linkages (substitutes or complements) across downstream product markets, and supply linkages through the common use of a raw commodity as the key input. Applying the model to the dairy sector, we find that the effectiveness of producer-funded advertising, and thus optimal advertising intensities, depends on the demand relationships across dairy product markets (cross-price and cross-advertising elasticities), as well as the re-allocation of raw milk towards the advertised market. We argue that the previous literature, which ignores the horizontal linkages highlighted here, tends to overstate the effectiveness of generic commodity promotion for dairy, and thus results in too much advertising.Marketing,

Commodity Policies and Product Differentiation: the California Milk Marketing Order and the Organic Dairy Sector

This paper evaluates the economic consequences of milk marketing orders for producers and consumers in organic and conventional milk markets. We develop a multi-market equilibrium displacement model that disaggregates the organic and conventional segments of the California milk market in order to evaluate the economic effects of alternative policies. We find that exemption of organics from marketing order regulation would make organic farmers better off at the expense of conventional farmers, but that complete deregulation would make both organic and conventional farms worse off.California, cartel, dairy, equilibrium displacement model, milk marketing orders, organic, Demand and Price Analysis, Marketing,

AJAE Appendix: The Commodity Terms of Trade, Unit Roots, and Nonlinear Alternatives

The material contained herein is supplementary to the article named in the title and published in the American Journal of Agricultural Economics.Nonlinear model;, Primary commodities;, Smooth transition autoregression;, Time-varying autoregression, Unit root tests, International Relations/Trade, O13, C12, C22, C52,

Unit Roots, TV-STARs, and the Commodity Terms of Trade: A Further Assessment of the Prebisch-Singer Hypothesis

Replaced with revised version of paper 06/27/06.Research Methods/ Statistical Methods,

Import Demand for Dairy Products in Cote d'Ivoire

We estimate an LA/AIDS model of demand for imported dairy products for Cote d'Ivoire. We employ a unique set of Ivorian customs data, spanning seven dairy products observed monthly from January 1996 to December 2005. Demand for milk powder is found to be inelastic, as substitutes for milk powder in the domestic processing industry are scarce. Demand for fluid milk, yogurt, and cream are found to be elastic, as these domestic products produced from imported powder may substitute for the imports. With the exception of condensed milk, dairy products are found to be necessities.International Relations/Trade,

Allocation of Authority in Agricultural Production Contracts

The objective of this paper is to develop a model that explains the involvement of first level handlers in farm level decisions. In particular, the research attempts to explain observed differences among levels of farmer's autonomy in production contracts of different agricultural commodities. We show that the trade off that a contractor faces for holding the decision rights for controlling production inputs varies for different production environments. In particular, the contractor prefers controlling inputs in production of commodities that have relatively uniform production environments, whereas it is more efficient to delegate the control to the producer for commodities that have diverse production environments.Agribusiness,

Farm Level Incidence of the U.S. Farm Policy Proposal to the WTO

A farm level simulation model is used to analyze the financial impacts of the U.S. proposal to the WTO to reduce farm subsidy payments. The impacts are examined for farms of different sizes, debt positions, and household characteristics. Results indicate that cash flow impacts of the policy change are much greater than net worth impacts.Agricultural and Food Policy,

The Economics of Reducing Package Size: Consumer response and returns to manufacturers.

Marketing, Production Economics,

A closer look at the role of the fruit and vegetable planting restriction provision on land use in the United States

Current U.S. farm programs make payments to farmers based in part on historical base acres planted in particular program crops such as corn, soybeans, cotton, wheat and soybeans. Eligibility for payments includes regulations on the crops allowed to be grown on base acres, and there are restrictions on planting horticultural crops on such base acres. The fruits and planting restriction on base acres has potentially influenced the number of acres planted to fruits and vegetables over the past two decades. This research carefully examines the effects of planting restrictions applied to vegetables and program crops, using county-level data in the United States in 1982, 1987, 1992 and 1997. The paper employs the difference-indifference (DiD) approach to estimate acreage response to planting restrictions. The results show planting restrictions crowded out land used for growing fruits and vegetables, most notably in the Great Lakes region that produces processing vegetables.Crop Production/Industries, Land Economics/Use,

Dairy Market Participation with Endogenous Livestock Ownership: Evidence from Cote d'Ivoire

This study evaluates determinants of dairy market participation by agricultural households in Cote dIvoire by using the Heckman selection model to correct for endogenous cattle ownership. A key result is that ignoring the population of non-owners biases estimates of market participation parameters. These findings are important in light of the widespread application of livestock market participation analyses that assume cattle ownership is exogeneous.Cote dIvoire, dairy, endogenous adoption, Heckman selection model, market participation, Livestock Production/Industries,