Free-rider effects of generic advertising: The case of salmon

Henry Kinnucan and Øystein Myrland
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Øystein Myrland: Department of Economics and Management, University of Tromsø, Tromsø, Norway, Postal: Department of Economics and Management, University of Tromsø, Tromsø, Norway

Agribusiness, 2003, vol. 19, issue 3, 315-324

Abstract: The free-rider effects of commodity promotion are a neglected issue in the empirical literature. This study addresses the lacuna by considering the salmon promotion program conducted by the Norwegian Seafood Export Council. Specifically, a model of the world salmon market is used to indicate returns to Norwegian producers from NSEC's marketing activities, but also returns to Norway's international competitors. Results suggest program intensification would have a positive effect on total (worldwide) producer surplus in the short run, but the gain's distribution is uneven. Specifically, Norway would receive 23% of the gain compared to 48% for United Kingdom producers. By way of comparison, Norway and UK world trade shares are 47 and 16%, respectively. The disproportionate gains to UK producers are due to a double free ride: from the export tax used to fund the advertising increase, and from the advertising itself. [EconLit citations: L660, Q130, Q170]. © 2003 Wiley Periodicals, Inc. Agribusiness 19: 315-324, 2003.

Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:19:y:2003:i:3:p:315-324

DOI: 10.1002/agr.10061

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