Advertising impacts on demand for orange juice, January 2002

Both a single equation model and Rotterdam demand system were used to estimate the impact of advertising on OJ demand. In the single equation model, OJ gallon sales were related to OJ advertising, grapefruit juice advertising, the price of OJ, seasonality variables, consumer income, and a dummy variable for September 11 to further capture possible effect resulting from changes in the U.S. economy and consumer confidence after that point in time. The impact of each of these variables was estimated by applying the ordinary least squares regression method to data from September 1997 to November 2001. The results suggest that recent decreases in OJ demand are related to declines in FDOC advertising, as well as perhaps declines in incomes and changes in consumer behavior since September 11. Prices have been relative flat in the past year and appear to have little impact on OJ demand. Overall, decline in FDOC advertising were estimated to have resulted in a 4% to 5% decline in OJ demand. The Rotterdam model estimates were relatively similar.


Issue Date:
2002
Publication Type:
Report
PURL Identifier:
http://purl.umn.edu/52889
Total Pages:
22
Series Statement:
Research Papers
2002-1




 Record created 2017-04-01, last modified 2017-08-25

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