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The Allocation of Advertising and Research Dollars in the Florida Orange Juice Industry

International Journal on Food System Dynamics

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Title The Allocation of Advertising and Research Dollars in the Florida Orange Juice Industry
 
Creator Brown, Mark G.
Spreen, Thomas H.
 
Subject orange juice; returns to research; advertising
 
Description This study considers the allocation of Florida citrus-grower money between advertising and research programs to maximize grower revenue net of program costs. The allocation depends on the impact of advertising on demand and the impacts of research on the cost of production and supply. A number of studies have estimated the impact of advertising on OJ demand, but little is known about the impact of research. Research on citrus greening, a disease that has no known cure, is examined in the present study. There are no past studies to reliably gauge the impact of this research. The approach taken here is to ask if a given amount of research dollars is needed to reduce average production costs by certain amount, then what should be spent on advertising based on past estimates of the elasticity of demand with respect to advertising. The optimal ratio of advertising to research dollars increases with the advertising elasticity and declines with the amount of research money needed to reduce average costs. The results of this study provide a range for this ratio based on different advertising elasticities and amounts of research dollars needed to reduce production costs. The approach provides an indication of the importance of advertising given expectations on the research needed to successfully fight this disease.
 
Publisher CentMA
 
Contributor —
 
Date 2010-03-15
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Format application/pdf
 
Identifier http://centmapress.ilb.uni-bonn.de/ojs/index.php/fsd/article/view/115
10.18461/ijfsd.v1i1.115
 
Source International Journal on Food System Dynamics; Vol 1, No 1 (2010); 37-45
1869-6945
 
Language eng
 
Relation http://centmapress.ilb.uni-bonn.de/ojs/index.php/fsd/article/view/115/8