Commodity supply response to a producer-financed advertising program: The california avocado industry

Hoy Carman and Richard D. Green
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Richard D. Green: Department of Agricultural Economics, University of California, Davis, Postal: Department of Agricultural Economics, University of California, Davis

Agribusiness, 1993, vol. 9, issue 6, 605-621

Abstract: A simulation model of the California avocado industry is used to estimate the impact of a producerfunded generic advertising program on acreage and returns over time. Although returns from advertising can be quite favorable in the short-run, improved returns stimulate increased plantings and the resulting production will erode advertising returns over time. California avocado producers, after over 30 years of actively promoting their product, appear to have real returns per acre similar to those that would have occurred without advertising but advertising has become a built-in cost. © 1993 John Wiley & Sons, Inc.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:9:y:1993:i:6:p:605-621

DOI: 10.1002/1520-6297(199311)9:6<605::AID-AGR2720090607>3.0.CO;2-4

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