Have Expenditures to Advertise California Almonds Been Effective?
نویسندگان
چکیده
The Almond Marketing Or der, established in 1950, pro vides the industry with various tools to influence the demand and supply of almonds with the goal of increasing grower returns. Among its provisions, the Order authorizes the industry to undertake advertising and promotion. Funds for this purpose are collected through an assessment on almond handlers. The Order allows for (and programs have generally included) a provision for handlers to receive full or partial credit on their assessment for advertising their own products. The industry has also conducted a generic advertising program. The entire advertising program was suspended for crop years 1994/95 – 1996/97 due to litigation. This study evaluates the eco nomic impacts of advertising and promotion expenditures funded under the almond marketing order and provides an estimate of the cost to the industry of suspending its program for the indicated years. We ask whether the advertising programs conducted under the al mond order have been effective in increasing demand for almonds in the United States, and whether the expenditures have been cost effec tive in the sense of yielding benefits to growers in excess of the costs borne by them. Our study focused on the U.S. market for almonds, where most almond promotion expenditures have been directed. However, be cause about two thirds of each year’s crop is exported nowadays, our simulation model also takes account of the export market in determining price impacts due to almond promotion. We specified a model where per-capita quanti ties of almonds consumed annually in the United States were represented as a function of the real (deflated) price of almonds,
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