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An Economic Evaluation of the Hass Avocado Promotion Order’s First Five Years

Author

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  • Carman, Hoy F.
  • Li, Lan
  • Sexton, Richard J.

Abstract

The U.S. avocado industry has evolved from an emphasis on seasonal domestic production of a mix of avocado varieties to year-round availability of domestic and imported Hass avocados. California avocado producers, who account for approximately 90% of U.S. avocado production and essentially all U.S. Hass avocado production, have funded promotional programs for avocados since 1961. With few imports of avocados prior to the early 1990s, the benefits from these demand-enhancing programs flowed directly to California producers. Imports of avocados into the United States have increased steadily since then, resulting in a free-rider problem that led ultimately to creation of the Hass Avocado Promotion, Research, and Information Act of 2000. This act established the authorizing platform and timetable for creation of the Hass Avocado Promotion, Research, and Information Order (HAPRIO), which was approved in 2002. This study evaluates the promotion activities conducted by the Hass Avocado Board (HAB) during its first five years of operation. The report discusses the major marketing programs conducted under the auspices of HAB, provides an overview of trends in U.S. consumption of avocados, and contains a detailed analysis of annual demand for avocados in the United States with the goal of determining the impact that promotions have had on avocado demand. The report introduces and implements a simulation framework to estimate the impact of avocado promotion on grower prices and incomes and on consumption of avocados based on the results of the demand analysis. It provides an analysis of avocado demand and the impact of promotion based on retail scanner data, and presents the analysis of the impacts of HAB’s information-sharing and dissemination program.

Suggested Citation

  • Carman, Hoy F. & Li, Lan & Sexton, Richard J., 2009. "An Economic Evaluation of the Hass Avocado Promotion Order’s First Five Years," Research Reports 121697, University of California, Davis, Giannini Foundation.
    • Handle: RePEc:ags:dgiarr:121697
    DOI: 10.22004/ag.econ.121697
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    References listed on IDEAS

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    1. Alston, Julian M. & Carman, Hoy F. & Chalfant, James A. & Crespi, John M. & Sexton, Richard J. & Venner, Raymond J., 1998. "The California Prune Board's Promotion Program: An Evaluation," Research Reports 11926, University of California, Davis, Giannini Foundation.
    2. Hoy F. Carman, 2006. "Offsetting Price Impacts from Imports with Generic Advertising and Promotion Programs: The Hass Avocado Promotion and Research Order," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 463-481.
    3. Tülin Erdem & Michael P. Keane, 1996. "Decision-Making Under Uncertainty: Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Markets," Marketing Science, INFORMS, vol. 15(1), pages 1-20.
    4. Daniel H. Pick & Jeffrey Karrenbrock & Hoy F. Carman, 1990. "Price asymmetry and marketing margin behavior: An example for California-Arizona citrus," Agribusiness, John Wiley & Sons, Ltd., vol. 6(1), pages 75-84.
    5. Carman, Hoy F. & Craft, R. Kim, 1998. "An Economic Evaluation of California Avocado Industry Marketing Programs, 1961-1995," Research Reports 11925, University of California, Davis, Giannini Foundation.
    6. Hoy F. Carman & Richard J. Sexton, 2005. "Supermarket fluid milk pricing practices in the western United States," Agribusiness, John Wiley & Sons, Ltd., vol. 21(4), pages 509-530.
    7. Richard J. Sexton & Mingxia Zhang, 1996. "A Model of Price Determination for Fresh Produce with Application to California Iceberg Lettuce," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 924-934.
    8. Hoy F. Carman & Richard D. Green, 1993. "Commodity supply response to a producer-financed advertising program: The california avocado industry," Agribusiness, John Wiley & Sons, Ltd., vol. 9(6), pages 605-621.
    9. George C. Davis, 2006. "The Economics of Commodity Promotion Programs: Lessons from California," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1115-1117.
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    Cited by:

    1. Williams, Gary W. & Welch, J. Mark, 2015. "An Economic Analysis of the Potential Returns from a Future National Wheat Checkoff Program," Reports 285198, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.
    2. Carman, Hoy F. & Sexton, Richard J., 2011. "Effective Marketing of Hass Avocados: The Impacts of Changing Trade Policy and Promotion/Information Programs," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(4), pages 1-14, November.

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