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Identifying the Extensive and Intensive Effects of Generic Advertising on the Household Demand for Fluid Milk and Cheese

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  • Schmit, Todd M.
  • Chung, Chanjin
  • Dong, Diansheng
  • Kaiser, Harry M.
  • Gould, Brian W.

Abstract

A two-step sample selection model is used to estimate household demand equations for fluid milk and cheese products incorporating national generic advertising. This approach allows us to disentangle the incidence of the advertising effect on the probability of purchase and changes in the level of consumption. Generic advertising for fluid milk had a predominantly intensive effect on athome fluid milk demand, implying that advertising was relatively more effective at increasing the consumption of current consumers. Conversely, the at-home cheese demand response to generic cheese advertising was almost exclusively extensive, with virtually the entire increase in quantity demanded due to an increase in the household’s probability of purchase.

Suggested Citation

  • Schmit, Todd M. & Chung, Chanjin & Dong, Diansheng & Kaiser, Harry M. & Gould, Brian W., 2001. "Identifying the Extensive and Intensive Effects of Generic Advertising on the Household Demand for Fluid Milk and Cheese," Research Bulletins 122642, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudarb:122642
    DOI: 10.22004/ag.econ.122642
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    References listed on IDEAS

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    1. John Lenz & Harry M. Kaiser & Chanjin Chung, 1998. "Economic analysis of generic milk advertising impacts on markets in New York State," Agribusiness, John Wiley & Sons, Ltd., vol. 14(1), pages 73-83.
    2. Brian W. Gould & Jorge Cornick & Thomas Cox, 1994. "Consumer Demand for New Reduced-fat Foods: An Analysis of Cheese Expenditures," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 42(3), pages 367-380, November.
    3. Blisard, Noel & Blayney, Donald & Chandran, Ram & Smallwood, David & Blaylock, James, 1997. "Evaluation of fluid milk and cheese advertising, 1984-96," Technical Bulletins 312339, United States Department of Agriculture, Economic Research Service.
    4. Boehm, William T., 1975. "The Household Demand For Major Dairy Products In The Southern Region," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 7(2), pages 1-10, December.
    5. Kaiser, Harry M., 1999. "Impact of Generic Fluid Milk and Cheese Advertising on Dairy Markets, 1984-1998," Research Bulletins 122684, Cornell University, Department of Applied Economics and Management.
    6. Bronsard, Camille & Salvas-Bronsard, Lise, 1984. "On price exogeneity in complete demand systems," Journal of Econometrics, Elsevier, vol. 24(3), pages 235-247, March.
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    Cited by:

    1. Pofahl, Geoffrey M. & Capps, Oral, Jr. & Clauson, Annette L., 2005. "Demand for Non-Alcoholic Beverages: Evidence From The ACNielsen Home Scan Panel," 2005 Annual meeting, July 24-27, Providence, RI 19441, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Lin, Biing-Hwan & Smith, Travis A. & Lee, Jonq-Ying, 2010. "Effects of Taxing Sugar-Sweetened Beverage and Subsidizing Milk: Beverage Consumption, Nutrition, and Obesity among US Children," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116448, European Association of Agricultural Economists.
    3. Stockton, Matthew C. & Capps, Oral, Jr., 2005. "Demand System Analysis With Emphasis On Container Sizes Of Non-Alcoholic Beverages," 2005 Annual meeting, July 24-27, Providence, RI 19137, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Stockton, Matthew C., 2005. "A Demand System Analysis With Emphasis On Container Size Of Fluid Milk," A.E. Research Series 305036, University of Idaho, Department of Agricultural Economics and Rural Sociology.

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    Consumer/Household Economics; Marketing;

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