Measuring the Impacts of Generic Fluid Milk and Cheese Advertising: A Time-Varying Parameter Application

Abstract

Previous constant-parameter demand models have estimated generic advertising elasticities for cheese to be below that for fluid milk. We relax this assumption, allowing for generic advertising response to vary over time. Cheese advertising elasticities were found below fluid milk up until the mid-1990s; average elasticities since have been similar. A benefit-cost ratio of the farmer-funded generic advertising program was estimated at $6.26:1 over the period of 1999-2001, indicating that generic advertising for fluid milk and cheese continues to be a viable and worthwhile program for milk producers