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Abstract

A conceptual and empirical framework for estimating the effects of dairy advertising on farm prices and producer returns is developed The model consists of an industry-derived demand equation for milk linking advertising and government purchase. to farm price, and a government purchases equation linking advertising and support prices to government purchases The econometric model is a mixed continuous/ discrete system, estimated by the Amenyia Principle The two-equation system is estimated for both aggregated manufactured advertising and dlsaggregated manufactured advertising The results are consistent with theory and show Significant effects of advertising, particularly for fluid advertising

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