Country of Origin Advertising and U.S. Wine Imports

Stanley Thompson () and Abdoul G. Sam

No 6553, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The objective of this paper is to investigate the impact of media advertising on the US consumption of imported wine. A panel data of seven countries and twelve years from 1994-2005 is used to estimate the demand function for US wine imports. Our empirical analysis reveals evidence of strong price and advertising effects of domestic and imported wines on imported quantities; the advertising of imported wines significantly increases the quantity of imports while the advertising of domestic wines has a strong depressing effect on imported wine volumes. Our short-run import demand price and advertising elasticity estimates are -0.406 and 0.109 for imports and 0.654 and -0.370 for domestic wines, respectively. Other determinants such as population, real income and country specific fixed effects are also found significant. Based on our model estimates, we compute the marginal return to advertising to be $2.68 on average for the six importing countries and $3.40 for the U.S.

Keywords: International Relations/Trade; Marketing (search for similar items in EconPapers)
Pages: 18
Date: 2008
New Economics Papers: this item is included in nep-cul and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6553

DOI: 10.22004/ag.econ.6553

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