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New Varieties and the Returns to Commodity Promotion: The Case of Fuji Apples

Published online by Cambridge University Press:  15 September 2016

Timothy J. Richards  and
Paul M. Patterson
Timothy J. Richards
Affiliation:
Morrison School of Agribusiness and Resource Management at Arizona State University
Paul M. Patterson
Affiliation:
Morrison School of Agribusiness and Resource Management at Arizona State University
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Abstract

The Fuji apple variety is relatively new in the U.S. As a new product, questions concern the relative impact of consumer learning by experience, by variety-specific promotion, or by generic apple promotion. A two-stage (LES/LAIDS) model incorporating both types of promotion is used to estimate the effect of generic and variety specific promotion, as well as consumer experience, on the demand for Fuji apples. Estimates show each to have a positive impact, and also show new or specialty apple varieties to be relatively price inelastic, but income elastic. Grower returns to promotion are calculated with an equilibrium displacement model of price changes and producer surplus. Changes in producer surplus provide a base-scenario benefit:cost ratio of 6.33:1.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 29 , Issue 1 , April 2000 , pp. 10 - 23
Copyright
Copyright © 2000 Northeastern Agricultural and Resource Economics Association 

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