A fresh meat almost ideal demand system incorporating negative TV press and advertising impact.pdf

Agricultural Economics 25 (2001) 359–374 A fresh meat almost ideal demand system incorporating negative TV press and advertising impact Wim Verbeke a,?,1, Ronald W. Ward b a Department Agricultural Economics, Ghent University, B-9000 Gent, Belgium b Food and Resource Economics Department, University of Florida, Gainesville, FL 32611-0240, USA Abstract This paper investigates fresh meat consumption in Belgium during 1995–1998 through the specification of a three-equation almost ideal demand system (AIDS) incorporating a media index of TV coverage and advertising expenditures as explanatory variables. Estimated parameters and elasticity coefficients are plausible and consistent with demand theory. Own-price elastic- ities are relatively low, indicating a low fresh meat demand sensitivity to price changes over this period which was dominated by mass media reports about the potential health risks associated with meat consumption. The scope of the paper extends beyond the estimation of elasticity coefficients and includes the specification of a media index and simulations that provide insights into the impact of negative press relative to advertising efforts. Specifically, the impact of television publicity is shown to have been particularly negative on beef/veal expenditures in favour of pork/mixture. This finding corroborates expectations since mass media issues mainly pertained to BSE (mad cow disease) and hormone residues during the investigated period. With relatively little effort being undertaken and with its current strategy, fresh meat advertising is found to have only a minor impact compared with negative press. ? 2001 Elsevier Science B.V. All rights reserved. JEL classification: D120; L660; M390 Keywords: Advertising; AIDS model; BSE; Consumer behaviour; Meat; Negative press 1. Introduction During recent years, fresh meat consumption heav- ily declined in Belgium as it did in most European countries. A considerable body of scientific research has recently bee