Economic analysis of generic milk advertising impacts on markets in New York State

Abstract

This article examines the responsiveness of fluid milk sales to generic milk advertising in New York City, Albany, Syracuse, Rochester, and Buffalo markets. Fluid milk demand equations for New York City, Albany, Syracuse, Rochester, and Buffalo are estimated with monthly data for the period from January 1986 through June 1995. The results indicate that generic milk advertising is positive and statistically significant at the 10% significance level in each market. The highest advertising elasticity is in the Buffalo market, while the lowest is in Albany. The results also indicate that blend prices in the two New York milk marketing orders increased by 5.94 and 8.05 cents per cwt due to advertising, on average; while farmers invested 3.89 and 4.87 cents per cwt (in 1986 dollars) in fluid milk advertising for each market. A major policy implication is that New York dairy farmers should consider some reallocation of advertising expenditures among markets. © 1998 John Wiley & Sons, Inc.

The Impact of Generic Advertising on U.S. Household Cheese Purchases: A Censored Autocorrelated Regression Approach

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