An economic analysis of the Cattlemen’s Beef Promotion and Research Board demand-enhancing programmes

ABSTRACT

The research reported here addressed two objectives. The first objective was to measure the overall impact of the Cattlemen’s Beef Board as well as eight-specific advertising, promotion and research activities on US beef demand. The second objective was to compute marginal benefit–cost ratios (BCRs) for the eight individual checkoff activities and for the overall programme. The results indicated that Cattlemen’s Beef Board’s Promotion activities increased total domestic beef demand by 15.7 billion pounds in total, or 2.1 billion pounds per year between 2006 and 2014. Collectively, the overall marginal BCR for all Cattlemen’s Beef Board activities was $11.20.

KEYWORDS:

• Generic Beef Promotion
• beef demand
• equilibrium displacement model
• benefit–cost analysis

JEL CLASSIFICATION:

• Q11
• Q13
• Q18

Notes

¹ Generic advertising and promotion programmes are sometimes referred to as ‘checkoff’ programmes. The term ‘checkoff’ sprung up because the original programmes were voluntarily funded and producers had to check a box indicating whether or not they would contribute.

² The initial specification of the model included 12 separate dummy variables corresponding to the months January through December. The final model consisted of only those months that had a significant seasonality, which included February (negative), June (positive), August (positive), October (positive) and December (negative).

³ Specifically, most of these variables were specified as a second-degree polynomial distributed lag (PDL). The model was then solved without end point restrictions being imposed, alternative length of lags were specified, and the final model was chosen based on the best statistical. A PDL structure was used for generic pork advertising and all Cattlemen’s Beef Board-sponsored marketing activities with the exception of new product development and product enhancement research, which were aggregated and included as a 6-month lagged variable.

⁴ The initial specification of the model included 12 separate dummy variables corresponding to the months January through December. The final model consisted of only those months that had a significant seasonality, which included February (negative), March (positive), May (positive), June (positive), July (positive), August (positive) and October (positive).

⁵ One per cent was used rather than completing eliminating expenditures since the logarithm of zero is undefined.

Additional information

Funding

This work was supported by the Cattlemen’s Beef Promotion and Research Board.