Advertising and Retail Promotion of Washington Apples: A Structural Latent Variable Approach to Promotion Evaluation
Xiaoming Gao and
Paul M. Patterson
No 28547, Working Papers from Arizona State University, Morrison School of Agribusiness and Resource Management
"Commodity promotion" consists of many activities, each designed to contribute to a consumer's product knowledge or influence tastes. However, both knowledge and tastes are unobservable, or latent, variables influencing demand. This paper specifies a dynamic structural model of fresh fruit demand that treats promotion and other socioeconomic variables as "causal" variables influencing these latent variables. Estimating this state-space model using a Kalman filter approach provides estimates of both the system parameters and a latent variable series. The results show that these latent effects contribute positively to apple and other fruit consumption, while reducing banana consumption.
Keywords: commodity promotion; demand system; DYMIMIC; fresh fruit; Kalman filter; LA/AIDS; latent variables; Marketing (search for similar items in EconPapers)
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Journal Article: ADVERTISING AND RETAIL PROMOTION OF WASHINGTON APPLES: A STRUCTURAL LATENT VARIABLE APPROACH TO PROMOTION EVALUATION (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:asumwp:28547
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