Source: UNIV OF CONNECTICUT submitted to
FOOD MARKETING POLICY CENTER FOR RESEARCH
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
TERMINATED
Funding Source
Reporting Frequency
Annual
Accession No.
0218911
Grant No.
2009-34178-19929
Project No.
CONS2009-03399
Proposal No.
2009-03399
Multistate No.
(N/A)
Program Code
CJ
Project Start Date
Sep 1, 2009
Project End Date
Aug 31, 2012
Grant Year
2009
Project Director
Lopez, R.
Recipient Organization
UNIV OF CONNECTICUT
(N/A)
STORRS,CT 06269
Performing Department
Agri & Resource Economics
Non Technical Summary
This research will address major issues that effect food policy decisions in the following areas. The economics of obesity, antitrust enforcement in food markets, the development of agricultural pricing policies for milk and the implementation of firm based hazard programs to improve food safety. This reseaarch will provide new approches to the analysis of demand and will especially focus on the strategic impacts of advertising as well as pricing on the marketing of food products.
Animal Health Component
(N/A)
Research Effort Categories
Basic
20%
Applied
60%
Developmental
20%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6045010301040%
6035010301040%
7125010301020%
Goals / Objectives
To analyze several facets of oligopolistic conduct and market performance in the food system. To seek to understand strategic pricing and advertising, the management of advertising on kids, and its impact on obesity via possibly increased consumption of high fat and sweetened foods.
Project Methods
Examine breakfast cereal, salty snacks, soft drinks, and candy brands to determine consumer's marginal evaluation of fat and calories by brand and food type. Conduct research on food advertising that analyzes the extent of informative versus persuasive advertising and its impacts. Analyze country of origin labeling and advertising. Dynamic models of retail milk pricing test for alternative pricing strategies in different market structures (competitive conditions) and address the nature of price cycles: period, amplitude, and asymmetry. A theoretical model explains lobbying and efforts to receive protection from import competition. It tests the model predictions using data from U.S. food industries.

Progress 09/01/09 to 08/31/12

Outputs
OUTPUTS: Outputs include new knowledge on consumer response, especially childrens' responses, to the advertising of unhealthy foods and beverages. Outreach reports on milk pricing provided an accurate basis for support payments for Connecticut farmers. Outputs include new knowledge on marketing towards children, household purchasing behavior,and television advertising of food products to children. An updated report on food security in CT towns will inform researchers and policy makers. Conference presentations included: A .Rabinowitz: "A Comparative Analysis of Retail Milk Pricing with and without State Pricing Policies." at the NAREA Annual Meeting and "Connecticut Experience with Milk COP Update",at the Dairy Cost of Production Summit, University of Connecticut, Storrs, CT, November, 2011.At the AAEA Annual Meetings in Seattle, Washington in August 2012: Graduate student J.Hogan and J.Berning: "What is the Relationship between Education and Food Purchases among Food Insecure Households"; Y.Liu: "Price Discrimination with Asymmetric Firms: The Case of the U.S.Carbonated Soft Drinks Market" and "Television Advertising and Soda Demand: An analysis with Aggregate and Micro Data"; A.Rabinowitz: "The Endogeneity of Crime and Food Store Locations: Implications for Food Access."Graduate student X.Li and R.Lopez.:"Spillover Effects of TV Advertising: The Case of Carbonated Soft Drinks."At the ISMS Marketing Science Conference in Boston, June 2012, J.Berning, R.Huang, and A.Rabinowitz:"Does breakfast cereal advertising target young children" and R.Huang and J.Berning, with H.Liu :"Star Wars and Cereal Wars: Implications of food marketing with movie tie-ins." AAEA/EAAE in May 2012, J.Berning:"The effect of retail grocery coupons for breakfast cereals on household purchasing behavior"; R.Huang, J.Berning and A.Rabinowitz:"An evaluation of government proposed restrictions on television advertising of food products to children"; and A.Rabinowitz: "The Effects of Alternative Format Stores on the Measurement of Food Deserts." J.Berning: "Does physician advice lead to weight loss" at the EEA Annual Conference, in Boston in March 2012.Y.Liu: "Applied Model Specification Tests: Theory and Application to Consumer Choice Models" at the Invited Seminar, Department of Economics, University of California, Riverside, June 2012; A.Rabinowitz:, with J.Martin, "Community Food Security in Connecticut: An Evaluation and Ranking of 169 Towns." at the Department of Agricultural and Resource Economics Seminar Series, University of Connecticut, Storrs, CT; "Community Food Security in Connecticut: An Evaluation and Ranking of 169 Towns." at the Center for Land Use Education & Research Webinar presentation, University of Connecticut, Haddam, CT, July 2012.R.Huang: "The Use of Voluntary Marketing Initiatives to Improve the Health Profile of Kids Cereals", International Industrial Organization Conference, George Mason School of Law, VA, March 2012; and as invited research seminar at New York University, Fordham University, and UMass. R.Lopez: "Television Advertising and Demand for Carbonated Soft Drinks" at North Carolina State University in May 2012. PARTICIPANTS: Participants: University of Connecticut Professors Rigoberto Lopez (PI), Ronald Cotterill, Joshua Berning, Rui Huang, Yizao Liu, and graduate students John Hogan, Adam Rabinowitz, Charles Rhodes, Elena Castellari, Chen Zhu, Xun Li, Huang Lu, and Hualu Zheng. Collaborators and contacts: University of Massachusetts Department of Resource Economics Professor Julie Caswell; New York University Stern School of Business Associate Professor Michael Cohen; Pennsylvania State University Agricultural and Resource Economics Associate Professor Alessandro Bonanno. TARGET AUDIENCES: Policy makers, governments, researchers in fields of food policy, marketing, and industrial organization. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
The purchase of Nielsen/Mintel data sets greatly aided research in food marketing. Work on milk pricing and policy had dramatic impacts on farmers in Connecticut .Six outreach reports during this period at the request of the Connecticut Commissioner of Agriculture to provide milk cost of production estimates. These reports led to millions of dollars in support payments to farmers in the state. R.Lopez's work on the economic impact of agriculture in Connecticut's economy had wide-reaching policy implications. R. Cotterill's work on antitrust extended from conference presentations to testimony that greatly expanded knowledge in that area. An active schedule of conference presentations in 2012, by researchers, disseminated new information to peers. An updated report on community food security in Connecticut will have policy implications across the state. Research on the relationship of carbonated soft drink demand has implications for obesity policy. Research on Wal-Mart's monopsony power expanded knowledge in the area of Wal-Mart's impact on prices.

Publications

  • Berning, J.P. (2011), "Evaluating Excise Taxes: The Need to Consider Brand Advertising." Choices, 14(E).
  • Bonanno, A. and Lopez, R.A. (2012), "Wal-Mart's Monopsony Power in Metro and Non-Metro Labor Markets." Regional Science and Urban Economics, 42 (4):569-579.
  • Chen, Z., and Lopez, R.A. (2012), "Weight Implications of Soda Consumption." AgroFOOD Industry High Tech, 23(2).
  • Cohen, M.A., and Cotterill, R.W. (2011), "Assessing the Impact of Retailer Store Brand Presence on Manufacturer Brands in an Equilibrium Framework. The Journal of Industrial Economics, 59, 372-395. doi: 10.1111/j.1467-6451.2011.00460.x
  • Cotterill, R. (2012), "The Evolution of Quantitative Food Marketing Policy: A Public Perspective."Agricultural and Resource Economics Review, 41, no. 1 (April):1-11.
  • Huang, R. and Kiesel, K. (2012), "Does Limited Access to Soft Drinks in Schools Result in Compensation at Home", European Review of Agricultural Economics, doi: 10.1093/erae/jbs003
  • Liu, X., and Lopez, R.A. (2012), "Evidence of rational addiction to carbonated soft drinks", China Agricultural Economic Review, 4(3): 300 - 317.
  • Rabinowitz, A.N. and Lopez, R.A. (2011),"Maine Milk Cost of Production Estimates for April, May, and June 2011". Outreach Report retrieved from University of Connecticut Zwick Center for Food and Resource Policy Web site:http://zwickcenter.uconn.edu/documents/or3.pdf
  • Rabinowitz, A.N. and Lopez, R.A. (2011),"Milk Cost of Production Estimates for July, August, and September 2011". Outreach Report retrieved from University of Connecticut Zwick Center for Food and Resource Policy Web site: http://zwickcenter.uconn.edu/documents/or4.pdf
  • Rabinowitz, A.N. and Lopez, R.A. (2012), "Milk Cost of Production Estimates for October, November, and December 2011". Outreach Report retrieved from University of Connecticut Zwick Center for Food and Resource Policy Web site: http://zwickcenter.uconn.edu/documents/OutreachNo.5.pdf
  • Rabinowitz, A.N. and Lopez, R.A. (2012), "Milk Cost of Production Estimates for January, February, and March 2012". Outreach Report retrieved from University of Connecticut Zwick Center for Food and Resource Policy Web site: http://zwickcenter.uconn.edu/documents/Outreach6-Q12012COP8-28-12.pdf
  • Rabinowitz, A.N. and Lopez, R.A. (2012),"Milk Cost of Production Estimates for April, May, and June 2012". Outreach Report retrieved from University of Connecticut Zwick Center for Food and Resource Policy Web site:http://zwickcenter.uconn.edu/documents/Outreach7-Q22012COP8-28-1 2.pdf
  • Lopez, R.A. and Fantuzzi, K. (2012), "Demand for Carbonated Soft Drinks: Implications for Obesity Policy." Applied Economics, 44 (2):2859-2865.
  • Rabinowitz, A.N. and Lopez, R.A. (2011),"Comparison of Dairy Farming in Connecticut, Vermont, and Maine for Purposes of Determining the Appropriate Cost of Production Benchmark for Connecticut". Outreach Report retrieved from University of Connecticut Zwick Center for Food and Resource Policy Web site:http://zwickcenter.uconn.edu/documents/or2.pdf


Progress 09/01/10 to 08/31/11

Outputs
OUTPUTS: The outputs of this project include new knowledge on consumer reponse to advertising unhealthy food and beverage products, disseminated through five conference papers as a response to the Federal Trade Commission call for comments on the issue of advertising to children. McCullough, M. and J. Berning presented "Coordinating on Reducing Advertising: Carbonated Soft Drinks Industry and Combating Obesity." AAEA Selected paper presented at the AAEA & NAREA Joint Annual Meeting, Pittsburgh, PA, July 24-26, 2011. M.Cohen and R.Huang presented "An Empirical Model of New Product Launch" Selected Paper for INFORMS Marketing Science Conference, Houston, TX, June 2011. Huang, R. and Bonanno, A. presented "Health Claims Regulation and Welfare", AAEA Annual Conference, Pittsburg, PA, July 2011. Cohen, M. and Huang, R. "An Empirical Analysis of Advertising, Pricing, & Product Line Extension", INFORMS Marketing Science Meeting, Houston, TX, June 2011. Cohen, M. and A. Rabinowitz. Conference Proceedings. An Empirical Analysis of Equilibrium Pricing and Advertising in the Ready to Eat Cereal Market. Selected Paper, International Industrial Organization Conference, April 8-10, 2011, Boston, MA. Berning, J., A. Rabinowitz and R. Huang, 2011. An evaluation of government proposed restrictions on television advertising of food products to children. University of Connecticut, Storrs CT. PARTICIPANTS: University of Connecticut Professors Rigoberto Lopez, Ronald Cotterill, Joshua Berning, Rui Huang, Postdoc Michael Cohen, and PhD students Adam Rabinowitz, Jason Patalinghus, Chen Zhu, and Charles Rhodes. A. Bonanno, Department of Agricultural Economics adn Rural Sociology, Pennsylvania State University, and M. McCullough, Department of Agribusiness, CalPoly. TARGET AUDIENCES: Researchers in the field of food marketing policy and industrial organization, policy makers. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
R. Lopez's work with the Connecticut Department of Agriculture helped to create conditions to ensure economic stability for farmers. R.Lopez's publication, Economic Impacts of Connecticut's Agricultural Industry received widespread interest and showed that the economic impact of agriculture is estimated at $3.5 billion, far higher than previously reported.

Publications

  • No publications reported this period


Progress 09/01/09 to 08/31/10

Outputs
OUTPUTS: R. Cotterill(co-PI) was an expert economic witness, estimating plaintiff's damages in a class action monopolization case. R. Cotterill attended Special Conference on the Econometric Analysis of Scanner Data in London, England and, with Michael Cohen, presented "Evaluation of Brand Level Pricing, Advertising, and Promotion Strategies with an Application to Merger Analysis." R. Lopez (co-PI) met with U.S. Representative Rosa DeLauro (CT-3 ) in September 2009, and U.S. Congressman Joe Courtney (CT-2), member of the Agricultural Committee and co-chair of the Dairy Caucus, in February 2010 to discuss food policy priorities for the state of Connecticut and the nation. R. Lopez was given a Special Achievement Award, Connecticut Farm Bureau Association, November 2009 for work on dairy policy. R.Lopez (co-PI) was invited speaker at China Agricultural University in Beijing on demand for differentiated products with heterogeneous consumers. M.Cohen attended the International Industrial Organization Conference, Vancouver, British Columbia, May 2010. PARTICIPANTS: Ronald Cotterill, Director, Food Marketing Policy Center, University of Connecticut. Rigoberto Lopez, Professor and Department Head, Department of Agricultural and Resource Economics, University of Connecticut. Joshua Berning, Post-Doctoral Fellow, Assistant Professor(since August 2010), Department of Agricultural and Resource Economics, University of Connecticut. Rui Huang, Assistant Professor, Department of Agricultural and Resource Economics, University of Connecticut. Michael Cohen, Post-Doctoral Fellow, Assistant Professor in Residence(Since August 2010), Department of Agricultural and Resource Economics, University of Connecticut TARGET AUDIENCES: Policy makers, governments, researchers in the fields of food policy, marketing, and industrial organization. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
R. Cotterill continued work on the Puerto Rican milk market helped to set prices and his work in an antitrust case provided expert analysis for plaintiff's damages. R. Lopez's work with state lawmakers helped to shape policy decisions. Work on brand level pricing advanced the Center's research. Cotterill was an invited Panelist at the USDA/DOJ Agriculture and Antritrust Enforcement Workshop at the University of Wisconsin--Madison in June 2010 to discuss dairy issues. Lopez was an invted Panelist at the USDA/DOJ Agriculture and Antitrust Enforcement Workshop in Washington, D.C. in December 2010, to discuss margins in teh U.S. dairy industry.

Publications

  • Huang, R., Fulginiti L. and Peterson, W., 2010. Health and Growth: Causality through Education. China Agricultural Economic Review Vol. 2 Iss: 3, pp.321-344.
  • Berning, Joshua P., Hayley H. Chouinard, and Jill J. McCluskey. 2009. Measuring the impact of nutrition labels on food purchasing decisions: A field experiment with scanner data. University of Connecticut, Storrs, CT. October. RR#117.pdf
  • Huang, Rui. and Jeffrey M. Perloff. 2009. WIC Contract Spillover Effects. University of Connecticut, Storrs, CT. December. RR#118.pdf
  • Cohen, Michael A. and Ronald W. Cotterill. 2009. Assessing the Impact of Retailer Store Brand Presence on Manufacturer Brands in an Equilibrium Framework. University of Connecticut, Storrs, CT. December. RR#119.pdf
  • Berning, Joshua P., Hayley H. Chouinard, Kenneth C. Manning, Jill J. McCluskey, and David E. Sprott. 2009. Identifying Consumer Preferences for Nutrition Information on Grocery Store Shelf Labels. University of Connecticut, Storrs, CT. December.RR#120.pdf
  • Cohen, Michael A. and M. Selini Katsaiti. 2009. Evaluating Health Care Externality Costs Generated by Risky Consumption Goods. University of Connecticut, Storrs, CT. December. RR#121.pdf
  • Cohen, Michael A. 2010. A Structured Covariance Probit Demand Model." University of Connecticut, Storrs, CT. January. RR#123.pdf
  • Lopez, Rigoberto A. and Kristen L. Fantuzzi. 2010. Carbonated Soft Drink Choices and Obesity. University of Connecticut, Storrs, CT. January. RR#124.pdf
  • Cohen, Michael and Ronald Cotterill. Conference Proceedings. Evaluation of Dynamic Pricing and Advertising Strategies with an Application to Merger Analysis. Invited Paper for the Special Conference on the Econometric Analysis of Scanner Data, London, England, UK, March 2010.
  • Liu, X. and R.A. Lopez. Conference Proceedings. The Impact of Wal-Mart on Incumbent Supermarket Profits. Selected Paper, Agricultural and Applied Economics Association, July 25-27, 2010, Denver, CO.