OPTIMAL ADVERTISING WITH TRADED RAW AND FINAL GOODS: THE CASE OF VARIABLE PROPORTIONS TECHNOLOGY

John Cranfield

Journal of Agricultural and Resource Economics, 2002, vol. 27, issue 01, 18

Abstract: An optimal advertising investment rule is derived for a vertically related, competitive market with traded final and raw goods and processing sector characterized by variable proportions technology and nonconstant returns to scale. An equilibrium displacement framework incorporating conditional factor demands is used to account for the elasticity of substitution between agricultural and nonagricultural inputs to the marketing channel. Simulation for the Canadian beef industry in the post-WTO environment demonstrates how optimal advertising intensity ranges between 0.05% and 0.22% of farm-level market revenue.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:31084

DOI: 10.22004/ag.econ.31084

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