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Irreversibility in Advertising-Demand Response Functions: An Application to Milk

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  • Philip R. Vande Kamp
  • Harry M. Kaiser

Abstract

A generalized methodology for estimating irreversible functions is developed. This approach, which accommodates short-term irreversibility and long-term reversibility, is an improvement over previous irreversibility studies that imposed both short- and long-term irreversibility. Using the proposed methodology, irreversibility in the demand response to fluid milk advertising in New York City is evaluated. Irreversibility is found to exist, and, in particular, consumers are found to react more rapidly to increases in advertising compared to decreases. This result may have important implications for optimal temporal advertising strategies. Copyright 1999, Oxford University Press.

Suggested Citation

  • Philip R. Vande Kamp & Harry M. Kaiser, 1999. "Irreversibility in Advertising-Demand Response Functions: An Application to Milk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 385-396.
    • Handle: RePEc:oup:ajagec:v:81:y:1999:i:2:p:385-396
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    Citations

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    Cited by:

    1. Adeyemi, Olutomi I. & Hunt, Lester C., 2007. "Modelling OECD industrial energy demand: Asymmetric price responses and energy-saving technical change," Energy Economics, Elsevier, vol. 29(4), pages 693-709, July.
    2. Gangopadhyay, Partha & Shankar, Sriram, 2016. "Energy efficiency in the ACI (ASEAN-China-India) countries: is there room for regional policy coordination?," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 6(2), pages 121-135.
    3. Richards, Timothy J. & Patterson, Paul M., 2004. "Causes of retail price fixity: an empirical analysis," Journal of Economics and Business, Elsevier, vol. 56(2), pages 117-136.
    4. Zheng, Yuqing & Kaiser, Harry M., 2009. "Dairy-borne Disease Outbreak and Milk Demand: A Study Using Outbreak Surveillance Data," Agricultural and Resource Economics Review, Cambridge University Press, vol. 38(3), pages 330-337, December.
    5. Yuqing Zheng & Harry M. Kaiser, 2009. "Evaluating the effectiveness of generic advertising versus nonadvertising marketing activities on New York State milk markets," Agribusiness, John Wiley & Sons, Ltd., vol. 25(3), pages 351-368.
    6. Sylvie Tchumtchoua & Ronald W. Cotterill, 2010. "Optimal Brand and Generic Advertising Policies in a Dynamic Differentiated Product Oligopoly," Food Marketing Policy Center Research Reports 126, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    7. Adachi, Kenji & Liu, Donald J., 2006. "Estimating Threshold Effects of Generic Fluid Milk and Cheese Advertising," 2006 Annual meeting, July 23-26, Long Beach, CA 21333, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Holloway Garth J. & Aydogus Osman, 2004. "Promotion Carryover as a Missing-Data Problem," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-18, February.
    9. Becker, Maren & Gijsenberg, Maarten J., 2023. "Consistency and commonality in advertising content: Helping or Hurting?," International Journal of Research in Marketing, Elsevier, vol. 40(1), pages 128-145.
    10. Raghbendra Jha & Hari K. Nagarajan, 2002. "Noisy Vertical Markets," ASARC Working Papers 2002-04, The Australian National University, Australia South Asia Research Centre.
    11. Odening, Martin & Musshoff, Oliver & Huettel, Silke, 2003. "Empirische Validierung von Realoptionsmodellen," Working Paper Series 18825, Humboldt University Berlin, Department of Agricultural Economics.
    12. Maynard, Leigh J., 2000. "Sources Of Irreversible Consumer Demand In U.S. Dairy Products," 2000 Annual meeting, July 30-August 2, Tampa, FL 21876, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Maynard, Leigh J., 2000. "Empirical Tests Of The Argument That Consumers Value Stable Retail Milk Prices," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 18(2), pages 1-18.
    14. Huang, Jiaqi & Antonides, Gerrit & Nie, Fengying, 2022. "Asymmetric price effects on food demand of rural households: Panel evidence from China," Journal of Economic Psychology, Elsevier, vol. 89(C).
    15. Huntington, Hillard G., 2010. "Short- and long-run adjustments in U.S. petroleum consumption," Energy Economics, Elsevier, vol. 32(1), pages 63-72, January.
    16. Rickard, Bradley J. & Liaukonyte, Jura & Kaiser, Harry M. & Richards, Timothy J., 2010. "Examining consumer response to commodity-specific and broad-based promotion programs for fruits and vegetables using experimental economics," Working Papers 126965, Cornell University, Department of Applied Economics and Management.
    17. Chanjin Chung & Harry M. Kaiser, 2000. "Determinants of temporal variations in generic advertising effectiveness," Agribusiness, John Wiley & Sons, Ltd., vol. 16(2), pages 197-214.

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