IMPLEMENTING AN EXPANDED FOOD AND NUTRITION POLICY: A FARMER'S POINT OF VIEW

Agricultural and Food Policy,

Market Power in the Carbonated Soft Drink Industry

We investigate the strategic pricing for leading brands sold in the carbonated soft drink (CSD) market in the context of a flexible demand specification (i.e. random parameter nested logit) and a structural pricing equation. Our approach does not rely upon the often used ad hoc linear approximations to demand and profit-maximizing first-order conditions. We estimate the structural pricing equation using four different estimators (i.e. OLS, LIML, 2SLS, and GMM) and compare the implied deviation from Bertrand-Nash competition. Our results suggest that retailers, on average, price CSD brands below their cost, likely a result of the competitive retailing environment. We also find CSD wholesalers price their brands significantly more cooperatively than Bertrand-Nash would suggest, thus inflating profits.Market Power, Carbonated Soft Drinks, Econometrics, LIML, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Industrial Organization,

Consumer Impact of Animal Welfare Regulation in the California Poultry Industry

This study examines the consumer welfare impact of animal welfare legislation mandating cage-free egg production in California. We estimate California egg consumers’ willingness to pay (WTP) for cage-free eggs using household-level purchase data and compare the implied premium to higher production costs when calculating the potential change in consumer surplus. Our findings suggest that larger households and/or households with limited means are most likely to be affected. Furthermore, the implied welfare loss for consumers is approximately $106 million. Although consumers value cage-free eggs, higher production costs result in a net welfare loss to consumers. One implication of this finding is that a clear labeling practice may be a more efficient way to motivate animal welfare and non-cage systems.animal welfare regulation, California poultry, egg prices, egg supply, hen housing, mixed logit, willingness to pay, Livestock Production/Industries,

Measures of Brand Loyalty

Though brand loyalty has been studied extensively in the marketing literature, the relationship between brand loyalty and equilibrium pricing strategies is not well understood. Designing sales pricing strategies involves two key decisions: the percentage reduction in price from the existing price point, and the number or frequency of promotions within a category or for a specific product. These decisions, in turn, are critically dependent upon how many consumers can be convinced to switch to a brand by temporarily reducing its price, and how many are instead brand loyal. Theoretical models of how the size and strength of brand loyalty influence optimal promotion strategies have been developed, but there are no rigorous tests of their hypotheses. We test how brand loyalty impacts promotion strategies for a frequently purchased consumer package good category. Our results largely confirm that retailers often promote many brands simultaneously and that depth and breadth can be complementary.Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing,

Media Advertising and Ballot Initiatives: An Experimental Analysis

Marketing,

Problems with Unofficial and Inaccurate Geographical Names in the Fisheries Literature

Over a century of fi shery and oceanographic research conducted along the Atlantic coast of the United States has resulted in many publications using unofficial, and therefore unclear, geographic names for certain study areas. Such improper usage, besides being unscholarly, has and can lead to identification problems for readers unfamiliar with the area. Even worse, the use of electronic data bases and search engines can provide incomplete or confusing references when improper wording is used. The two terms used improperly most often are “Middle Atlantic Bight” and “South Atlantic Bight.” In general, the term “Middle Atlantic Bight” usually refers to an imprecise coastal area off the middle Atlantic states of New York, New Jersey, Delaware, Maryland, and Virginia, and the term “South Atlantic Bight” refers to the area off the southeastern states of North Carolina, South Carolina, Georgia, and Florida’s east coast

Commodity Price Pass-Through in Differentiated Retail Food Markets

Prices for nearly all basic commodity rose at unprecedented rates throughout early 2008, only to fall nearly as fast as financial markets and global economies began to collapse. Rising food prices in 2008 led to concerns that commodity price spikes would lead to more general food inflation, but by early 2009 interest focused more on the seeming inability of food prices to fall back down with commodity prices. This study provides an empirical investigation into the pass-through of commodity prices to retail prices for two different types of food products: potatoes and fluid milk. The results show that pass-through depends on the nature of the food in question, but is generally consistent with theoretical models of pricing by sellers of multiple, differentiated products. In particular, pass-through rates tend to be lower for processed (differentiated) products during periods of falling input prices than when input prices are rising. For less processed products, pass-through tends to be higher during regimes of both rising and falling input prices. Our results show that pass-through depends on the degree of pricing power possessed by all channel members and, more generally, suggest a nuanced approach to understanding retail food price inflation.commodity prices, conduct, industrial organization, inflation, market power, nested logit, pass-through, random parameters model, Consumer/Household Economics, Demand and Price Analysis, Industrial Organization, C35, D12, D43, L13, L41, Q13,

Media Advertising and Ballot Initiatives: An Experimental Analysis

Spending on political advertising increases with every election cycle, not only for congressional or presidential candidates, but also for state-level ballot initiatives. There is little research in marketing, however, on the effectiveness of political advertising at this level. In this study, we conduct an experimental analysis of advertisements used during the 2008 campaign to mandate new animal welfare standards in California (Proposition 2). Using subjects' willingness to pay for cage-free eggs as a proxy for their likely voting behavior, we investigate whether advertising provides real information to likely voters, and thus sharpens their existing attitudes toward the issue, or whether advertising can indeed change preferences. We find that advertising in support of Proposition 2 was more effective in raising subjects' willingness to pay for cage-free eggs than ads in opposition were in reducing it, but we also find that ads in support of the measure reduce the dispersion of preferences and thus polarize attitudes toward the initiative. More generally, political ads are found to contain considerably more "hype" than "real information" in the sense of Johnson and Myatt (2006).Animal Welfare, Proposition 2, Cage Free eggs, Willingness to Pay, BDM auction, Political Advertising, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Marketing, Political Economy, Production Economics, Public Economics,

Hysterisis in Food Safety Investments

Concerns regarding the safety and integrity of the fresh produce supply chain are becoming all too common in the media. In 2006, an outbreak of E. coli O157:H7 from farms in Central California sickened almost two hundred people and lead to the deaths of three. Estimated costs to the industry ranged from $100 per month to$200 million until spinach sales returned to normal. By some accounts, the spinach industry has yet to recover and may not for years to come. The incident, however, has lead to a host of initiatives from industry officials, legislators and fresh produce retailers to ensure the safety of fresh produce. The necessary technology and best practices knowledge exists, yet some growers have not made the investment required to ensure that such outbreaks do not happen again in the future.Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Industrial Organization,

Business Student And Practitioner Work Goals And Their Implications

The correspondence between individual work goals and available organizational rewards is a primary determinant of job satisfaction and motivation and is also likely to impact job performance. Differences between upper and lower division business students’ work goals suggest that changes had occurred as the students progressed through the curriculum that are likely to be functional for their work adjustment in modern organizations affected by current trends in job and organization design. However, some student priorities remained poorly matched with the available rewards and work requirements they are likely to find in these organizations.  The mismatched priorities contrasted sharply with those displayed by U.S. managers in a previous study