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A note on measuring returns to nonprice export promotion
Author(s) -
Kinnucan Henry W.,
Myrland Øystein
Publication year - 2001
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/agr.1026
Subject(s) - promotion (chess) , economics , measure (data warehouse) , microeconomics , econometrics , financial economics , computer science , database , politics , political science , law
For nonprice promotion to benefit producers, it must raise the farm price. This principle seems not to be widely appreciated. In particular, a formula commonly used to measure returns to export promotion does not reflect price enhancement and therefore is problematic. An additional problem is that marginal returns, the usual measure provided in the literature, are often confused with average returns. This article discusses these issues in some detail using as an example salmon promotion in France and Germany. Study results suggest that promotion elasticity‐based measures of returns can be misleading, especially in instances where producers or consumers are sensitive to price. [JEL Classifications: L660, Q130, Q170]. © 2001 John Wiley & Sons, Inc.