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Abstract
In this paper, we propose a novel approach to estimating the effect of advertising
on market performance that relies on the revealed preferences of firms
participating in generic advertising programs. Generic advertising campaigns
provide a unique window to observe advertising effects on market performance,
because rotations in market demand systematically redistribute advertising rents
among firms according to observable characteristics on producer size. We
examine producer attitudes towards generic advertising in the ”Beef. It’s What’s
for Dinner” campaign of the U.S. Beef Checkoff program, the subject of the recent
and controversial Supreme Court ruling on generic advertising as a form of
government speech. We find the likelihood producers favor an expansion of the
advertising program increases in their operating scale. This finding is consistent
with an advertising campaign that has led to a counterclockwise rotation of market
demand and a commensurate increase in market performance in the U.S. Beef
market.