Ronald W. Ward

Asymmetry in Retail, Wholesale, and Shipping Point Pricing for Fresh Vegetables

The linkage among retail, wholesale, and shipping point prices for a select group of fresh vegetables is measured using Wolfframs asymmetry model. Procedures for dealing with discontinuous time series are shown, and Grangers causality test is used to show the direction of the price linkage. Wholesale prices are shown to lead both retail and shipping point prices. Asymmetry in the retail-wholesale response indicates that wholesale price decreases are reflected at the retail more so than are wholesale price increases. Wholesale price decreases are more fully passed through to the shipping point relative to wholesale increases.

Probit analysis of fresh meat consumption in Belgium: Exploring BSE and television communication impact

This article focuses on factors influencing consumer decision making toward fresh meat consumption in Belgium. Discrete choice models are specified for explaining consumer decisions to decrease fresh meat consumption since the BSE-crisis and toward to the future. Demographic consumer characteristics, consumption frequency and attention to television coverage are included as explanatory variables in the models. A major focus is the impact of television, which has carried several negative reports about meat safety during recent years. Television coverage is found to have a highly negative impact on decision making toward fresh red meat consumption. Model estimation and computation of predicted probabilities reveal that the likelihood of cutting fresh meat consumption increases with greater attention given to television messages, as well as with the presence of young children in the household and with increasing age of the consumer. Interaction between attention to television and age reveals that younger peoples decisions are more susceptive to media coverage. Heavy meat consumers are least likely to cut fresh meat consumption. Findings include implications for future livestock production and communication by the meat industry. lEcon-Lit citations: D120, L660, M390r

Effectiveness of Fluid Milk Advertising Since the Dairy and Tobacco Adjustment Act of 1983

An econometric model pooling monthly cross-sectional and time-series data is estimated to measure the impact of national and regional generic fluid milk advertising. The estimated model shows that the effectiveness of advertising has increased since the implementation of the Dairy Adjustment Act. Gains in fluid milk sales attributed to milk advertising are estimated. Sales gains for both the pre- and post-act periods are shown along with the gains associated with parameter changes in the post-act periods. Marginal advertising responses are derived.

A Pooled Cross-Section Time Series Model of Coupon Promotions

Coupons influence consumption through both a price-discounting and advertising effect. These effects have been measured using consumer panel data on the retail consumption of frozen orange juice. Two cross-sectional time series models, estimated with a variance components procedure, show the effectiveness of coupons, assuming habit and nonhabit persistence along with consumer demographics. The response from coupons is shown to be conditioned by the container prices as well as with the characteristics of the redeemer.

Evaluation of publicity measures relating to the EU beef labelling system in Belgium

Abstract In response to growing consumer concerns about beef safety, the European Commission enacted several regulations concerning the identification and registration of bovine animals and compulsory labelling of beef and beef products. Additionally, the Commission provided funds for informing consumers about the guarantees offered by the traceability systems and the indicators on labels. This paper focuses on the evaluation of such publicity measures in Belgium during September 2000. The publicity campaign included a mass media advertisement with direct response components, and the distribution of a detailed information leaflet. The evaluation methodology includes cross-sectional data collection through consumer surveys pre and post the publicity event. The compulsory beef label indicators emerge as the least important and least attended cues by beef consumers. While the mass media advertisement scored well in terms of recall rate, informative content evaluation, and restoration of consumer confidence in beef, the direct response component and leaflet distribution were less successful. Implications pertain to the future planning and implementation of similar consumer information policies and publicity campaigns.

From Hedging to Pure Speculation: A Micro Model of Optimal Futures and Cash Market Positions

A theoretical model of optimal firm decisions in cash and futures markets that includes both primary product producers and marketing firms is presented. The generalized model of production and marketing decisions under risk is applied to both short and long hedging and speculation. Hedging and speculation are given precise definitions. Speculation exists when a firms futures position exceeds the 100 percent hedging level or when it does not provide hedging possibilities in conjunction with the cash market position. Comparisons between hedging on futures markets and forward contracting are made. Live beef futures are used to show how transformation costs for nonstorable commodities should be treated in the same manner as storage costs for storable commodities.

Commodity advertising: Theoretical issues relating to generic and brand promotions

Both generic and brand advertising have become increasingly important to food production and marketing systems. These two advertising messages may be complementary or competitive. Generic advertising is generally more factual and most likely reduces entry barriers. As generic advertising is increased, brand advertising will be forced to convey messages that are more difficult to validate. Generic advertising should encourage general consumption of the commodity class while brand advertising is directed to the consumption of specific brands that have both “real” and “fancied” differences.

A Model Of Retail Outlet Selection For Beef

Multinomial logit models were used to explain consumer outlet selection when buying beef, specifically roasts, steaks, ground beef, and other types of beef. Outlets were grouped into supermarkets, butchers, warehouses, supercenters, and others, and the probability of selecting each outlet type over a range of demographic and other variables was tested. The models were estimated from household data, with 198,682 observations used in the estimation. Empirical results showed that the type of beef purchased and the size of the purchase played an importance role in the choice of outlet. Furthermore, the increase in mobility seen when consumers buy larger unit cuts could not be fully explained by price discounting. Implications for the potential growth of each outlet types are discussed.

Empirical Contributions to Basis Theory: The Case of Citrus Futures

A futures basis should reflect the marginal cost of physical product plus a risk premium less a convenience yield. However, unique market characteristics may lead to basis bias not explained by the storage theory. An estimate of the basis model for frozen orange concentrate is used to test the theory of storage and to illustrate anticipatory aspects of the basis not included in storage theory.

Optimal Advertising Signals in the Florida Citrus Industry: A Research Application

A sales response to advertising for the Florida citrus industry is estimated and used to explore optimal levels of advertising. Results of an optimal control model show the gains that can be realized through inter- and intraseasonal changes in the level of advertising expenditures. These gains are generated by using imputed prices that take into account future gains of current advertising. An optimal path of adjustment in both advertising and sales over time is obtained which provides signals for an effective advertising policy.