Skip to main content
×
Home

The Ramifications of Nearly Going Dark: A Natural Experiment in the Case of U.S. Generic Orange Juice Advertising

Abstract

Evaluations of generic advertising programs by commodity check-off programs involve analyses of counterfactual scenarios in which advertising and promotion expenditures are set to zero over the program's history. In actual practice, the counterfactual is rarely realized. We present a case in which such a natural experiment occurred when generic advertising and promotion expenditures for U.S. orange juice were cut nearly to zero. Using structural econometric and autoregression models, we estimate losses in consumption and sales revenue and examine the time required for the market for orange juice to recover from the check-off's strategy of going nearly dark.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle.

      Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      The Ramifications of Nearly Going Dark: A Natural Experiment in the Case of U.S. Generic Orange Juice Advertising
      Available formats
      ×
      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Dropbox account. Find out more about sending content to Dropbox.

      The Ramifications of Nearly Going Dark: A Natural Experiment in the Case of U.S. Generic Orange Juice Advertising
      Available formats
      ×
      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Google Drive account. Find out more about sending content to Google Drive.

      The Ramifications of Nearly Going Dark: A Natural Experiment in the Case of U.S. Generic Orange Juice Advertising
      Available formats
      ×
Copyright
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Corresponding author
Correspondence: Oral Capps371 C AGLSDepartment of Agricultural Economics2124 TAMUCollege Station, TX 77843-2124 ■ Phone 979. 845.8492 ■ Email ocapps@tamu.edu.
References
Hide All
Alston J.M., Freebairn J.W., and James J.S.. 2001. “Beggar-thy-neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs.” American Journal of Agricultural Economics 83(4): 888902.
Attavanich W., McCarl B.A., and Bessler D.A.. 2011. “The Effect of H1N1 Media Coverage on Agricultural Commodity Markets.” Applied Economic Perspectives and Policy 33(2): 241259.
Awokuse T.O., and Bessler D.A. 2003. “Vector Autoregressions, Policy Analysis, and Directed Acyclic Graphs: An Application to the U.S. Economy.” Journal of Applied Economics 6(1): 124.
Baye M.R., Jansen D.W., and Lee J-W.. 1992. “Advertising Effects in Complete Demand Systems.” Applied Economics 24(10): 10871096.
Beaulieu J.J., and Miron J.A.. 1993. “Seasonal Unit Roots in Aggregate U.S. Data.” Journal of Econometrics 55(2): 305328.
Bernanke B.S. 1985. “Alternative Explanations of the Money-Income Correlation.” Carnegie-Rochester Conference Series on Public Policy 25(1): 4999.
Brester G.W., and Schroeder T.C.. 1995. “The Impacts of Brand and Generic Advertising on Meat Demand.” American Journal of Agricultural Economics 77(1): 125139.
Brown M.G. 1986. “The Demand for Fruit Juices: Market Participation and Quantity Demanded.” Western Journal of Agricultural Economics 11(2): 179183.
Brown M.G., and Lee J.Y.. 1997. “Incorporating Generic and Brand Advertising Effects in the Rotterdam Demand System.” International Journal of Advertising 16(3): 211220.
Brown M.G., and Lee J.Y.. 2002. “Advertising Impacts on Demand for Orange Juice.” Staff Report 2002-2, Florida Department of Citrus, University of Florida.
Brown M.G., and Lee J-Y.. 1999. “Health and Nutrition Advertising Impacts on the Demand for Orange Juice in Fifty Metropolitan Regions.” Journal of Food Products Marketing 5(3): 3147.
Capps O. Jr., Williams G.W., and Málaga J.. 2013. “Impacts of the Investments Made in Research, Promotion, and Information on Production and End Uses of Sorghum. Research Report to the United Sorghum Check-off Program.” Agribusiness, Food, and Consumer Economics Research Center, Department of Agricultural Economics, Texas A&M University.
Capps O. Jr., Williams G.W., Salin V.S., Martini J.S., and Brown D.S.. 2013. “Quantitative Evaluation of the Effectiveness of Marketing and Promotion Activities by the Milk Processor Education Program, Dairy Management, Inc., and Qualified Programs.” Report prepared for the USDA Agricultural Marketing Service, Agribusiness, Food, and Consumer Economics Research Center, Department of Agricultural Economics, Texas A&M University.
Chakravarti A., and Janiszewski C.. 2004. “The Influence of Generic Advertising on Brand Preferences.” Journal of Consumer Research 30(4): 487502.
Clarke D.G. 1976. “Econometric Measurement of the Duration of Advertising Effect on Sales.” Journal of Marketing Research 13(4): 345357.
Competitive Media Reporting / Publishers Information Bureau. 2014. Data, various issues, 1987–2002. Competitive Media Reporting, Hialeah, FL.
Cooley T.F., and LeRoy S.F.. 1985. “Atheorical Macroeconomics: A Critique.” Journal of Monetary Economics 16(3): 283308.
Cox T.L. 1992. “A Rotterdam Model Incorporating Advertising Effects: The Case of Canadian Fats and Oils.” In Commodity Advertising and Promotion. Ames, IA: Iowa State University Press.
Crespi J.M. 2003. “The Generic Advertising Controversy: How Did We Get Here and Where Are We Going?Review of Agricultural Economics 25(2): 294315.
Crespi J.M., and Sexton R.J.. 2001. “Marketing Orders and Brand Promotion: Got Lawyers?Choices 16(1): 1823.
Crespi J.M., and Sexton R.J.. 2005. “Evaluating the Effectiveness of California Almond Promotion: How Much Did the Litigation Cost Producers?” In Kaiser H.M., Alston J.M., Crespi J.M., and Sexton R.J., eds., The Economics of Commodity Promotion Programs: Lessons from California. New York, NY: Peter Lang Publishing.
Dickey D.A., and Fuller W.A.. 1981. “The Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root.” Econometrica 49(4): 10571072.
Forker O.D., and Ward R.W.. 1993. Commodity Advertising: The Economics and Measurement of Generic Programs. New York, NY: Lexington Books.
Geweke J., and Meese R.A.. 1981. “Estimating Regression Models of Finite but Unknown Order.” International Economic Review 22(1): 5570.
Haigh M., and Bessler D.A.. 2004. “Causality and Price Discovery: An Application of Directed Acyclic Graphs.” Journal of Business 77(4): 10991121.
Hoover K.D. 2005. “Automatic Inference of the Contemporaneous Causal Order of a System of Equations.” Econometric Theory 21(1): 6977.
Isariyawongse K., Kudo Y., and Tremblay V.J.. 2007. “Generic and Brand Advertising in Markets with Product Differentiation.” Journal of Agricultural and Food Industrial Organization 5(1): 115.
Kaiser H.M. 2006. “Evaluating the Economic Impacts of Generic Egg Advertising by the American Egg Board.” Report to the American Egg Board, Department of Applied Economics and Management, Cornell University, Ithaca, NY.
Kaiser H.M., Alston J.M., Crespi J.M., and Sexton R.J.. 2005. The Economics of Commodity Promotion Programs: Lessons from California. New York, NY: Peter Lang Publishing.
Kaiser H.M., and Liu D.J.. 1998. “The Effectiveness of Generic versus Brand Advertising: The Case of U.S. Dairy Promotion.” Review of Agricultural Economics 20(1): 6979.
Lütkepohl H. 1991. Introduction to Multiple Time Series Analysis. New York, NY: Springer-Verlag.
Nerlove M., and Waugh F.V.. 1961. “Advertising without Supply Control: Some Implications of a Study of the Advertising of Oranges.” Journal of Farm Economics 43(4): 813837.
Park M., Jin Y.H., and Bessler D.A.. 2008. “Impacts of Animal Disease Crises on the Korean Meat Market.” Agricultural Economics 39(2): 183195.
Piggott N.E., Chalfant J.A., Alston J.M., and Griffith G.R.. 1996. “Demand Response to Advertising in the Australian Meat Industry.” American Journal of Agricultural Economics 78(2): 268279.
Sims C.A. 1980. “Macroeconomics and Reality.” Econometrica 48(1): 148.
Spirtes P., Glymour C., and Scheines R.. 2000. Causation, Prediction, and Search (2nd edition). Cambridge, MA: MIT Press.
Swanson N., and Granger C.W.J.. 1997. “Impulse Response Functions Based on a Causal Approach to Residual Orthogonalization in Vector Autoregressions.” Journal of the American Statistical Association 92(437): 357367.
Ward R.W., and Dixon B.L.. 1989. “Effectiveness of Fluid Milk Advertising since the Dairy and Tobacco Adjustment Act of 1983.” American Journal of Agricultural Economics 71(3): 730740.
Ward R.W., and Lambert C.. 1993. “Generic Promotion of Beef: Measuring the Impact of the U.S. Beef Checkoff.” Journal of Agricultural Economics 44(3): 456465.
Waugh F.V. 1959. “Needed Research on the Effectiveness of Farm Product Promotion.” Journal of Farm Economics 41(2): 356376.
Williams G.W., and Capps O. Jr. 2006. “Measuring the Effectiveness of Checkoff Programs.” Choices 21(2): 7378.
Williams G.W., and Capps O. Jr. 2011. “Is the Cotton Checkoff Program Worth the Cost?Journal of Cotton Science 15(2): 109126.
Williams G.W., Capps O. Jr., and Dang T.. 2010. “Does Lamb Promotion Work?Agribusiness 26(4): 536556.
Williams G.W., Shumway C.R., and Love H.A.. 2002. “Returns to Soybean Producers from Investments in Promotion and Research.” Agricultural and Resource Economics Review 31(1): 97111.
Wohlgenant M.K., and Clary C.. 1992. “Development and Measurement of Farm to Retail Price Linkages for Evaluating Dairy Advertising Effectiveness.” Journal of Agricultural Economics Research 44(4): 1824.
Zheng Y., and Kaiser H.M.. 2008. “Advertising and U.S. Non-alcoholic Beverage Demand.” Agricultural and Resource Economics Review 37(2): 147159.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Agricultural and Resource Economics Review
  • ISSN: 1068-2805
  • EISSN: 2372-2614
  • URL: /core/journals/agricultural-and-resource-economics-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Keywords:

Metrics

Full text views

Total number of HTML views: 12
Total number of PDF views: 176 *
Loading metrics...

Abstract views

Total abstract views: 198 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 22nd November 2017. This data will be updated every 24 hours.