The Ramifications of Nearly Going Dark: A Natural Experiment in the Case of U.S. Generic Orange Juice Advertising

Abstract

Evaluations of generic advertising programs by commodity check-off programs involve analyses of counterfactual scenarios in which advertising and promotion expenditures are set to zero over the program's history. In actual practice, the counterfactual is rarely realized. We present a case in which such a natural experiment occurred when generic advertising and promotion expenditures for U.S. orange juice were cut nearly to zero. Using structural econometric and autoregression models, we estimate losses in consumption and sales revenue and examine the time required for the market for orange juice to recover from the check-off's strategy of going nearly dark.