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Generic Fluid Milk Advertising, Demand Expansion, and Supply Response: The Case of New York City
Author(s) -
Liu Donald J.,
Forker Olan D.
Publication year - 1988
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242061
Subject(s) - economics , consumption (sociology) , function (biology) , advertising , demand curve , microeconomics , business , biology , social science , evolutionary biology , sociology
A transfer function was used to estimate the fluid milk demand equation of New York City. The consumption effect of a generic fluid milk advertising program in the city was found to be positive and statistically significant. The resulting higher blend price of milk was found to have a negligible effect on the subsequent supply of milk. Though being successful in generating positive returns on advertising it was found that a 35% reduction in the advertising expenditures would have been optimal in the marginal sense.