Wholesale- and farm-level impacts of generic advertising: The case of catfish

Abstract

Abstract A four-equation econometric model of the US catfish industry is estimated to determine the impacts of industry funded advertising on the wholesale and farm levels of the market. Results suggest that, despite the market power held by middlemen, the compaign has increased quasi-rents to producers. The relatively large benefit-cost ratios (about 13:1), however, are attributed primarily to the price effects of the campaign. This highlights the importance of supply response in evaluating the economic effects of industry (generic) advertising programmes. Elasticity estimates based on 1980–89 monthly data are: farm-level supply, 0.15; wholesale-level demand, -1.01; farm-wholsale price transmission, 0.68; and advertising, 0.0075.