Promotion Research Program
Objectives and
Progress to Date
Objectives and Progress to Date
The overall purpose of the CCPRP is twofold: (1) to provide the public with information to help them judge the appropriateness of continuing authorization for commodity checkoff programs and continuing support of export promotion programs, and (2) to collaborate with and provide information to boards of directors and managers of commodity promotion checkoff programs to help them better utilize promotion funds. The CCPRP serves as a central source of knowledge about the economics of commodity promotion checkoff programs. Specific objectives include:
1. Support, coordinate, and conduct studies to identify key economic relationships and assess the impact of domestic and export commodity promotion programs on consumers, the food industry, farmers, and taxpayers.
2. Develop and maintain a comprehensive database on commodity promotion research and evaluation.
3. Facilitate the development of new theory and research methodology.
4. Facilitate the coordination of multi-commodity and multi-country research and evaluation efforts.
5. Enhance understanding of the economics of commodity promotion programs on the part of both public and private policy decision-makers through educational outreach programs.
The following is a progress report on CCPRP activities designed to fulfill the above objectives.
Identification of Key Economic Relationships and the Assessment of the Impact of Commodity Promotion Programs
One of the central objectives of the CCPRP is to complete existing projects and to develop new ones that address the evaluation of domestic and export promotion programs including those funded by the federal government. Specific projects that have high priority are:
1. Measurement of the economic impact on sales (consumer behavior) and farmer returns from specific domestic commodity promotion programs. Several kinds of economic models have been developed; this research builds on the experience of the past 20 years. Single and multiple equation econometric models are used to estimate promotion effects on consumer and industry behavior, and farmer returns. To measure the net effect of promotion programs, one needs to account for effects of other economic factors such as own price and supply, consumer purchasing power, the prices of competing goods, inflation, population changes, and trends in taste and productivity. (See projects 94-4, 94-5, 94-7, 94-9, 94-10, 94- 12, 95-1, 95-2, 96-3, 96-4. 97-2, 97-3, 97-4, 97-7.)
2. Determine the economic benefits of export promotion programs. Since these programs are partially funded by federal appropriations, potential benefits needing to be considered include impacts on the volume and/or value of exports, and impacts on domestic employment, economic growth, and net returns to farmers. (See projects 94-6, 95-5, 95-6, 97-6.)
3. Estimate the cross-commodity effects of commodity checkoff programs. A demand systems approach will be used to address this issue; new methodologies will also be explored. (See project 94-3.)
4. Determine economic benefits to farmers providing funds through checkoff programs. Some models have already been developed to estimate the impact on farm-level prices and account for farmers' supply responses. Other benefits are possible, e.g., better feedback to farmers concerning consumer preferences for product form and improvements in marketing and distribution efficiencies. (See: Project 94-4, 97-5.)
Development and Maintenance of Comprehensive Databases
In order to accomplish the empirical work envisioned above, a relatively large amount of additional data must be collected and archived. Some of these data, such as production levels, inventories, and prices, are available from public sources. Other data, such as program assessment and expenditure levels, must be collected from Leading National Advertisers (LNA), which is the only comprehensive national source of generic and branded advertising expenditure levels. Under this objective, the CCPRP has established a procedure for collecting the data and has put in place a computerized database at Cornell University. Currently, data on generic and branded food advertising expenditures have been entered into a computer database for 1988-94. We are planning to obtain a few more years worth of data prior to 1988, as well as continuing to update the data yearly. A system will also be established to make this data available to researchers at other universities and to directors and managers of promotion organizations. (See project 94-2.)
Development of New Theory and Research Methodology
Most of the economic evaluation effort to date has involved the measurement of consumer response to generic advertising. Little effort has been devoted to measuring the economic impact of other types of program activities such as in-store displays or demonstrations, new product development, new product research, basic research, nutrition programs, public relations, or educational programs. To address these issues, the CCPRP is developing appropriate theories and methodologies. This is a continuous process. (See project 94-8, 96-1, 97-1, 97-4.)
Facilitate the Coordination of Research and Evaluation Efforts
The coordination of research and evaluation has been and will continue to be accomplished through a series of annual meetings, at least two each year, held in conjunction with the meetings of NEC-63, the Committee on Commodity Promotion Research. These meetings provide visibility for groups involved in commodity promotion evaluation research. They also provide a means of coordination and a way of encouraging continual input to enhance the quality of research efforts. The CCPRP has developed a publication series through NICPRE as a way to compile information and make research results in this area more readily available to researchers and practitioners. The database discussed above includes a list of references with abstracts that are published annually and is now online.
Educational Outreach
The CCPRP has sponsored two types of outreach activities to communicate useful information on the economics of checkoff programs. The first is the publication of the NICPRE Quarterly, which is a quarterly newsletter initiated in the first quarter of 1995. Information for the newsletter is collected and edited by Cornell staff and published by Cornell University. Members of NEC-63 and others from academia, government, and industry contribute information. The newsletter is distributed to more than 500 people in academia, government, industry, and commodity promotion organizations. NICPRE Research Bulletins are also published and distributed to this mailing list. These research bulletins are papers written by researchers and provide further details on the data, estimation, models, results, and conclusions of their research projects.
The second type of project involves sponsorship of workshops, forums, conferences, and oral presentations devoted to extending research results to elected and appointed government officials and interested parties in the commodity promotion industry. The CCPRP has organized meetings of management from commodity promotion groups to discuss research priorities, sponsored a conference on commodity promotion economics at Cornell University, presented written and oral testimony to Congress on the impacts of generic dairy promotion, presented oral presentations at meetings sponsored by various commodity promotion organizations, and organized sessions at professional meetings on commodity promotion evaluation topics. (See projects 94-1, 94-11.)