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An economic analysis of generic egg advertising in California, 1985–1995
Author(s) -
Schmit Todd M.,
Reberte J. Carlos,
Kaiser Harry M.
Publication year - 1997
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/(sici)1520-6297(199707/08)13:4<365::aid-agr2>3.0.co;2-x
Subject(s) - liberian dollar , economics , econometric model , advertising , estimation , econometric analysis , agricultural economics , econometrics , business , finance , management
A supply and demand econometric model of the California egg industry was estimated to evaluate the impact of generic egg advertising on producer prices and returns from 1985 to 1995. Econometric estimation indicated advertising had a positive impact on producer prices and net profits. The model was simulated with existing advertising expenditure levels, and with expenditures 1% higher than actual levels. A 1% increase in advertising expenditures resulted in an average 0.13% increase in producer prices and a marginal rate of return to advertising of 6.9. In other words, each additional dollar spent on advertising generated $6.90 in producers' profits. © 1997 John Wiley & Sons, Inc.