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Commodity supply response to a producer‐financed advertising program: The california avocado industry
Author(s) -
Carman Hoy F.,
Green Richard D.
Publication year - 1993
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/1520-6297(199311)9:6<605::aid-agr2720090607>3.0.co;2-4
Subject(s) - acre , commodity , production (economics) , economics , product (mathematics) , advertising , agricultural economics , agribusiness , business , marketing , agriculture , microeconomics , agricultural science , finance , mathematics , environmental science , geometry , ecology , biology
A simulation model of the California avocado industry is used to estimate the impact of a producerfunded generic advertising program on acreage and returns over time. Although returns from advertising can be quite favorable in the short‐run, improved returns stimulate increased plantings and the resulting production will erode advertising returns over time. California avocado producers, after over 30 years of actively promoting their product, appear to have real returns per acre similar to those that would have occurred without advertising but advertising has become a built‐in cost. © 1993 John Wiley & Sons, Inc.