Resolving the Conflicts between Previous Meat Generic Advertising Studies

United States producer organizations spend millions of dollars on generic advertising of both beef and pork and other promotion programs designed to stimulate consumers' demand for meat. Producers need to know if the money allocated to generic advertising and these promotion programs is effective in increasing the demand for meat. Past research disagreed about the effectiveness of generic advertising. Models of Ward and Lambert and Brester and Schroeder are reestimated and tested for misspecification. The 5: 1 return on beef generic advertising found by Ward and Lambert has been widely quoted and has been used to justify spending on generic advertising. The conflicting findings about generic advertising effectiveness are shown to be primarily due to the data transformation used by Ward and Lambert. Results indicate that generic advertising does not substantially increase meat demand. However, the advertising elasticities are estimated inaccurately enough that we can also not reject that advertising is a breakeven investment