Effectiveness of State-level Pecan Promotion Programs: The Case of the Texas Pecan Checkoff Program
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abstract
The Texas Pecan Board was established in 1998 to administer the Texas Pecan Checkoff Program and is financed through a half cent per pound assessment on grower pecan sales. The Board spends the assessment collections on a variety of advertising campaigns in an attempt to expand demand for Texas pecans and to increase the welfare of Texas pecan growers. This article presents an evaluation of the economic effectiveness of the Texas Pecan Checkoff Program in expanding sales of Texas pecans. First, the effects of Texas Pecan Board promotion on sales of all Texas pecans are determined using the ordinary least squares estimator followed by a test for differential effects of Texas Pecan Board promotion activities on sales of improved and native Texas pecan varieties using the seemingly unrelated regression estimator. The analysis indicates that the Texas Pecan Checkoff Program has effectively increased sales of improved varieties of Texas pecans but has had no statistically measurable impact on sales of native varieties of Texas pecans. A benefitcost analysis determines that $35.0 in additional sales revenues are generated for every dollar invested in promotion, indicating that the Texas pecan promotion program has been financially successful. The per unit return is large but on a very few dollars available for investment in promotion implying the need for more investment for more meaningful returns.
