DO FARMERS GET AN EQUAL BANG FOR THEIR BUCK FROM GENERIC ADVERTISING PROGRAMS? A THEROETICAL AND EMPIRICAL ANALYSIS

This study presents a theoretical and empirical analysis of the distribution of generic advertising benefits across individual producers. We develop a closed-economy partial equilibrium model that allows for the presence of producer heterogeneity in supply response. Analytical results indicate that producers having less elastic supply response capture more benefits per dollar expended than producers with more elastic supply response. The extent of unequal distribution depends on parameters characterizing industries. The inequality may not be a significant problem for some industries, especially where the firm-level supply elasticities are not substantially different among producers, but it may be an important issue when industries have substantial differences in firm-level supply elasticities and firm sizes, and experience large demand shifts due to advertising programs


Subject(s):
Issue Date:
2000-07
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/30841
Published in:
Journal of Agricultural and Resource Economics, Volume 25, Number 1
Page range:
147-158
Total Pages:
12




 Record created 2017-04-01, last modified 2017-04-17

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