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The impact of generic advertising and the free rider problem: a look at the U.S. orange juice market and imports

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  • Brown, Mark G.
  • Lee, Jonq-Ying
  • Spreen, Thomas H.

Abstract

Increased demand for an advertised product may increase price, which, in turn, may lead to a free rider problem where competitive imports increase and result in a smaller price increase than otherwise. A study of Florida Department of Citrus advertising for orange juice indicated that the free rider problem has notably limited the impact of advertising on price in the U.S. market. High U.S. orange juice demand, which in part has been a result of advertising, has attracted substantial amounts of orange juice imports. Imports have eroded the impact of advertising on price by an estimated two-thirds.

Suggested Citation

  • Brown, Mark G. & Lee, Jonq-Ying & Spreen, Thomas H., 1995. "The impact of generic advertising and the free rider problem: a look at the U.S. orange juice market and imports," Research papers 52748, Florida Department of Citrus.
    • Handle: RePEc:ags:fdcrrp:52748
    DOI: 10.22004/ag.econ.52748
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    File URL: https://ageconsearch.umn.edu/record/52748/files/RP1995-4.pdf
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    References listed on IDEAS

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    1. Brown, Mark G. & Behr, Robert M. & Lee, Jonq-Ying, 1994. "Conditional Demand And Endogeneity? A Case Study Of Demand For Juice Products," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(01), pages 1-12, July.
    2. Ronald W. Ward & James E. Davis, 1978. "A Pooled Cross-Section Time Series Model of Coupon Promotions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(3), pages 393-401.
    3. Lee, Jonq-Ying & Fairchild, Gary F., 1988. "Commodity Advertising, Imports And The Free Rider Problem," Journal of Food Distribution Research, Food Distribution Research Society, vol. 19(2), pages 1-7, September.
    4. Brown, Mark G & Lee, Jonq-Ying, 1993. "Alternative Specifications of Advertising in the Rotterdam Model," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 20(4), pages 419-436.
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    Cited by:

    1. Capps, Oral, Jr. & Williams, Gary W. & Dang, Trang, 2010. "Effects of Lamb Promotion on Lamb Demand and Imports," Reports 90492, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.
    2. John M. Crespi, 2003. "The Generic Advertising Controversy: How Did We Get Here and Where Are We Going?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 294-315.
    3. Brown, Mark G. & Spreen, Thomas H. & Lee, Jonq-Ying, 2004. "Impacts On U.S. Prices Of Reducing Orange Juice Tariffs In Major World Markets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(2), pages 1-8, July.

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    Keywords

    Agribusiness; Demand and Price Analysis;

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