Examining consumer response to commodity-specific and broad-based promotion programs for fruits and vegetables using experimental economics

WP 2010-12 July 2010JEL Classification Codes: M37; Q13Generic promotion and advertising activities have traditionally been used to promote individual agricultural commodities. However, there is renewed interest in implementing a mandatory ?broad-based? promotion program for all fruits and vegetables, and this idea is highly controversial among those in the horticultural industry. Here we use data from an experiment that introduces subjects to various promotional efforts for fruits and vegetables to estimate the direct and indirect effects of advertising. Econometric results indicate that commodity-specific promotional efforts may be less effective at increasing demand for fruits and vegetables than earlier studies have suggested, yet such campaigns do appear to have a significant clockwise rotational effect on the demand for fruits and vegetables. Broad-based advertising does have a direct effect on the demand for fruits and vegetables, and after controlling for various demographic differences between treatments our results show that average willingness-to-pay for fruits and vegetables was 41% higher among subjects in the broad-based group compared to the control group

GMO and non-GMO labeling effects: evidence from a quasi-natural experiment

The United States recently mandated disclosure labels on all foods that contain genetically modified organisms (GMOs), despite longstanding, widespread use of voluntary third-party non-GMO labeling. We leverage the earlier passage and implementation of a mandatory GMO labeling law in Vermont as a quasi-natural experiment to show that adding this mandatory labeling into a market with pre-existing voluntary non-GMO labels had no effect on demand. Instead, the legislative process made consumers aware of GMO topics and increased non-GMO product sales before the GMO labeling mandate went into effect. The GMO-related legislative processes also increased non-GMO product demand in other states that considered, but did not implement, GMO labeling mandates. We find that 36% of new non-GMO product adoption can be explained by differences in consumer awareness tied to legislative activity. Our findings suggest that voluntary non-GMO labels may have provided an efficient disclosure mechanism without mandatory GMO labels

Evaluating advertising strategies for fruits and vegetables and the implications for obesity in the United States

WP 2010-19 October 2010We investigate consumer response to various types of advertising for fruits and vegetables—a food category which health officials uniformly agree is significantly underconsumed in the United States. Using an adult, non-student subject pool of participants in the experiment, consumers’ response to different broad-based (not used currently in the United States) and commodity-specific (widely used in the United States) advertising campaigns for various fruits and vegetables is empirically measured. We show that broad-based advertising effects far exceed those of the commodity-specific advertising and discuss the implications of the effective fruit and vegetable advertising programs on caloric intake and obesity management policies

Economic and Nutritional Implications from Changes in U.S. Agricultural Promotion Efforts

Promotion programs that subsidize advertising for exported agricultural products continue to be used despite much criticism that they are an inefficient use of taxpayer money. At the same time, others have advocated for an increase in funds to support domestic advertising for fruits and vegetables. We investigate the economic and nutritional effects from changes in both export and domestic promotion expenditures for horticultural and nonhorticultural commodities. Simulation results show that even modest decreases in trade promotion expenditures coupled with a corresponding increase in domestic promotion efforts have the capacity to influence domestic market conditions, caloric intake, and nutrient consumption

Economic and Nutritional Implications from Changes in the U.S Agricultural Promotion Efforts

WP 2012-16 December 2012JEL Classification Codes: Q13; Q17; Q18Promotion programs that subsidize advertising for exported agricultural products continue to be employed in the United States and elsewhere despite much criticism that they are an inefficient use of taxpayer money. At the same time others have advocated for an increase in funds to support domestic advertising for fruits and vegetables; they see a role for public investment in such an effort given consumer trust in the government regarding messages about food choice and health. Because much of the U.S. trade promotion expenditures are applied to fruit and vegetable crops, we investigate the economic and health effects from changes in both export and domestic promotion expenditures for horticultural and non-horticultural commodities. Simulation results show that even modest decreases in trade promotion expenditures coupled with a corresponding increase in domestic promotion efforts have the capacity to influence domestic market conditions, caloric intake, and nutrient consumption