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Abstract
This study considers the allocation of Florida citrus‐grower money between advertising and research programs to
maximize grower revenue net of program costs. The allocation depends on the impact of advertising on demand
and the impacts of research on the cost of production and supply. A number of studies have estimated the impact
of advertising on OJ demand, but little is known about the impact of research. Research on citrus greening, a
disease that has no known cure, is examined in the present study. There are no past studies to reliably gauge the
impact of this research. The approach taken here is to ask if a given amount of research dollars is needed to reduce
average production costs by certain amount, then what should be spent on advertising based on past estimates of
the elasticity of demand with respect to advertising. The optimal ratio of advertising to research dollars increases
with the advertising elasticity and declines with the amount of research money needed to reduce average costs.
The results of this study provide a range for this ratio based on different advertising elasticities and amounts of
research dollars needed to reduce production costs. The approach provides an indication of the importance of
advertising given expectations on the research needed to successfully fight this disease