Generic fluid milk advertising, demand expansion, and supply response: The case of new york city

A transfer function was used to estimate the fluid milk demand equation of New York City. The consumption effect of a generic fluid milk advertising program in the city was found to be positive and statistically significant. The resulting higher blend price of milk was found to have a negligible effect on the subsequent supply of milk. Though being successful in generating positive returns on advertising it was found that a 35% reduction in the advertising expenditures would have been optimal in the marginal sense.