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New Varieties and the Returns to Commodity Promotion: Washington Fuji Apples

Timothy James Richards and Paul M. Patterson

No 28541, Working Papers from Arizona State University, Morrison School of Agribusiness and Resource Management

Abstract: The Fuji apple variety is relatively new in the U.S. As a new product, questions concern the relative impact of consumer learning by experience, by variety-specific promotion, or by generic apple promotion. A two-stage (LES/LAIDS) model incorporating both types of promotion is used to estimate the effect of generic and variety specific promotion, as well as consumer experience, on the demand for Fuji apples. Estimates show each to have a positive impact, and also show new or specialty apple varieties to be relatively price inelastic, but income elastic. Grower returns to promotion are calculated with an equilibrium displacement model of price changes and producer surplus. Changes in producer surplus provide a base-scenario benefit:cost ratio of 14.73. Keywords: apple demand, experience, LAIDS, new products, producer surplus, promotion, varieties.

Keywords: apple demand; experience; LAIDS; new products; producer surplus; promotion; varieties.; Marketing (search for similar items in EconPapers)
Date: 1998
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Working Paper: NEW VARIETIES AND THE RETURNS TO COMMODITY PROMOTION: WASHINGTON FUJI APPLES (1998) Downloads
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