Marketing research in consumer packaged goods shows that consumers’ brand choices, category choices, and purchase volumes are all affected by different factors and in different ways by pricepromotions
and advertising. Research also suggests that brand-loyalty, purchase rates, and inventory behavior are important determinants of category choice. These findings are likely to be true of apples as well.

The Fuji apple variety is relatively new in the U.S. As a new product, questions concern the relative impact of consumer learning by experience, by variety-specific promotion, or by generic apple promotion. A two-stage (LES/LAIDS) model incorporating both types of promotion is used to estimate the effect of generic and variety specific promotion, as well as consumer experience, on the demand for Fuji apples. Estimates show each to have a positive impact, and also show new or specialty apple varieties to be relatively price inelastic, but income elastic. Grower returns to promotion are calculated with an equilibrium displacement model of price changes and producer surplus. Changes in producer surplus provide a base-scenario benefit:cost ratio of 14.73.

A structural latent variable model of apple variety demand is used to analyze the effect of variety specific newspaper advertisement characteristics on variety attraction (preferences), and in turn on variety demand. The influence of advertisement size, the use of color and the Washington apple logo were analyzed. The estimated variety attraction variable is important in explaining demand. Model specifications which exclude this variable tend to understate demand elasticities. Advertisement size has a positive impact on Granny Smith, Fuji, and Gala sales. Red Delicious sales are positively influenced by color ads, but negatively affected by ads with the Washington apple logo.

Proposals for reform of the federal multiple-peril crop insurance program for specialty crops seek to change fees for catastrophic insurance from a nominal fifty-dollar per contract registration fee to an actuarially sound premium. Growers argue that this would cause a significant reduction in participation rates, thus impeding the program’s goals of eventually obviating the need for ad hoc disaster payments and worsening the actuarial soundness of the program. The key policy issue is, therefore, empirical one - whether the demand for specialty crop insurance is elastic or inelastic. Previous studies of this issue using either grower or county-level field crop data typically treat the participation problem as either a discrete insure / don’t insure decision or aggregate these decisions to a continuous participation rate problem. However, a grower’s problem is more realistically cast as one of simultaneously making a coverage level / insurance participation decision. Because the issue at hand considers a significant price increase for only one coverage level (50%), differentiating between these decisions is necessary both from an analytical and econometric standpoint. To model this decision, the paper develops a two-stage estimation procedure based on Lee’s multinomial logit-OLS selection framework. This method is applied to a county-level panel data set consisting of eleven years of the eleven largest grape-growing counties in California. Results show that growers choose among coverage levels based upon expected net premiums and the variance of these returns, as well as the first two moments of expected market returns. At the participation-level, the mean and variance of indemnities are also important, as are several variables measuring the extent of self-insurance, such as farm size, enterprise diversity, or farm income. The results also show that the elasticity of 50% coverage insurance is elastic, suggesting that premium increases may indeed worsen the actuarial soundness of the program. These increases will also cause a significant adjustment of growers among coverage levels.

“Commodity promotion” consists of many activities, each designed to contribute to a consumer’s product knowledge or influence tastes. However, both knowledge and tastes are unobservable, or latent, variables influencing demand. This paper specifies a dynamic structural model of fresh fruit demand that treats promotion and other socioeconomic variables as "causal" variables influencing these latent variables. Estimating this state-space model using a Kalman filter approach provides estimates of both the system parameters and a latent variable series. The results show that these latent effects contribute positively to apple and other fruit consumption, while reducing banana consumption.