Three essays on commodity promotion programs /
Prior research shows that there is not an accurate and systematic measure of the effectiveness of commodity checkoff programs. Accurate evaluations are important because some producers have legally challenged these programs and the evaluations are mandatory for federally-mandated programs. In additi...
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| Format: | Thesis Book |
| Language: | English |
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[Place of publication not identified] :
[publisher not identified] ;
2002.
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| Online Access: | http://proxy.library.tamu.edu/login?url=http://proquest.umi.com/pqdweb?did=764774271&sid=1&Fmt=2&clientId=2945&RQT=309&VName=PQD |
| Summary: | Prior research shows that there is not an accurate and systematic measure of the effectiveness of commodity checkoff programs. Accurate evaluations are important because some producers have legally challenged these programs and the evaluations are mandatory for federally-mandated programs. In addition, the correspondence between individual and industry level returns is addressed by allowing firm differentiation. The finance formula choice is addressed first. Two popular options to measure rate of return are net present value (NPV) and net benefit-cost (NBC). These formulas are in turn affected by specification choices such as the discount rate, lag length of promotional expenditures, and sample size. The dissertation emphasizes that studies using non-discounted NPV tend to overestimate the effect of promotion and research investments. Increasing the last lag leads to increases in both NPV and NBC, increasing the first lag leads to decreases in both NPV and NBC, and increasing the horizon leads to increases in NPV and to an indeterminate effect on NBC. This suggests that conservative NPV or NBC estimates are obtained by utilizing a higher first lagged term. The welfare measure choice is addressed next. Traditionally, producer surplus has been the most popular choice to determine the economic benefit of checkoff programs to producers. Recent studies have used the profit function approach. This dissertation expands on the profit function approach and develops a more flexible general welfare measure. Conditions are derived that allow the general welfare measure to reduce to the profit functions used in other studies as well as to producer surplus. The correspondence between individual level and industry level returns is addressed by allowing firm differentiation in the industry. Taking this general welfare measure, an empirical test for the federally-mandated soybean program is carried out to determine if the condition that allows reducing the general welfare measure to producer surplus holds. The estimation methodology used takes into account a system of share equations augmented with a reduced-form price equation. The results indicate that a 2nd order Taylor series expansion is sufficient to measure producer welfare. For each 1% increase in promotion expenditures, industry profits decrease 44%. |
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| Item Description: | Vita. "Major Subject: Agricultural Economics". |
| Physical Description: | ix, 150 leaves ; 28 cm. Issued also on microfiche from University Microfilm Inc. |
| Bibliography: | Includes bibliographical references (leaves 116-120). |