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.

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.

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 bulk of consumed Genetically Modified (GM) foods, in the United States, come from corn, soybeans and their products (corn syrup, tofu, popcorn, oils, tortillas, etc.). Some other GM crops and foods or foods containing GM components are cotton (cottonseed oil), canola, genetically engineered rennin cheese, “light beer” and papayas. The making of food related GM crops, GM animals and processing aids address economical, nutritional-health and environmental issues. “Fitness” related genes such as insect, herbicide and disease resistance are found in most “deregulated” (approved) GM food crops. Other food crops and animals may be modified to be more nutritious (“Golden Rice”) or protein fortified (cow milk for cheese-making). GM foods may be labeled on a voluntary basis. Educational programs to inform consumers about GM foods are a necessary step toward establishing confidence-building measures.

The population of all golf course facilities that existed in Arizona in 2004 was identified and basic information regarding city, county, number of holes, and year established were collected for all 338 Arizona golf facilities. In addition, the economic impacts from revenue, tourism, and real estate premiums attributed to the Arizona golf course industry were estimated for 2004 based upon a survey of all Arizona golf course facilities. Seventy-seven golf course managers returned either partially or fully completed questionnaires, representing an overall response rate of 22.8 percent. Unbiased mean-based estimates of various impacts and other types of information contained in the survey were obtained through use of both the sample and population data. The estimates are reported for all golf courses in Arizona in 2004.

Widespread obesity in the U.S. is a relatively recent phenomenon, reaching epidemic proportions only in the last 15 years. However, existing research shows that while calorie expenditure through physical activity has not changed appreciably since 1980, calorie consumption has risen dramatically. Consequently, any explanation of obesity must address the reason why consumers tend to overeat in spite of somewhat obvious future health implications. This study tests for an addiction to food nutrients as a potential explanation for the obesity epidemic. Specifically, we use a random coefficients (mixed) logit model applied to household scanner data to test a multivariate version of the rational addiction model of Becker and Murphy and Chaloupka. We find evidence of a rational addiction to all nutrients – protein, fat and carbohydrates – as well as to sodium, but particularly strong evidence of a forward-looking addiction to carbohydrates. The implication of this finding is that price-based policies – sin taxes or produce subsidies that change the expected future costs and benefits of consuming carbohydrate-intensive foods – may be effective in controlling excessive nutrient intake.

Supermarket retailers make strategic pricing decisions in a high-frequency, repeated game environment both in buying and selling fresh produce. In this context, there is some question as to whether a non-cooperative equilibrium can emerge that produces margins above the competitive level. Supermarket pricing results from tacitly collusive equilibria supported by trigger price strategies played in upstream markets. Upstream activities are, in turn, driven by periodic retail price promotions. We test this hypothesis using a sample of fresh produce pricing data from 20 supermarket chains in markets distributed throughout the U.S. Our results support the existence of tacitly collusive non-cooperative equilibria in upstream and downstream markets.

Many public programs promote diets rich in fruits and vegetables based on evidence on the derived health benefits. Sill, produce consumption in the U.S. lags behind other nations, even its most culturally similar neighbor–Canada. This study uses a structural latent variable model to test the role quality and health information play in explaining observed differences in produce consumption. The Alchian-Allen effect predicts that higher quality, higher absolute margin produce will be exported, suggesting that quality may be an important demand factor in importing nations such as Canada. The results show that dietary health information is significant in expanding demands. Quality also promotes fruit consumption in Canada.

Product-line length, or variety, is a key competitive tool used by retailers to differentiate themselves from rivals. Theoretical models of price and variety competition suggest that both store and product heterogeneity are key determinants of price and variety strategies, but none test this hypothesis in a rigorous way. This study provides the first empirical evidence on supermarket retailers’ combined price and variety strategies using a nested CES modeling framework. Unlike other discrete-choice models of product differentiation, the NCES model is sufficiently general to admit both corner and interior solutions in both store and product choice. The model is estimated using store-level scanner data for all grocery chains in a major West Coast market and finds that retailers do indeed use both price and product-line strategies to compete for market share, but tend to follow moderately cooperative pricing strategies and price and more cooperative strategies in variety.

Supermarkets use periodic price promotions, or “sales” on a regular basis for a variety of products. Relatively little is understood about why supermarkets promote perishable items such as fresh fruits and vegetables, dairy products or meat. The primary contribution of this paper lies in demonstrating that sales among perishable food items are mixed-strategy equilibria among multi-product retailers in which managers choose both the size of the promotion and the number of products to promote.