Newspaper advertisement characteristics and consumer preferences for apples: A mimic model approach

A structural latent variable model is used to simultaneously determine the affect of newspaper advertisement characteristics on consumer preferences for apples and on demand for apple varieties. The advertisement characteristics considered included size, color, and logos. The estimated apple preference variable is an important explanatory variable in apple variety demand. Model specifications that exclude the variable tend to overstate own-price demand elasticities. Ad size has a positive impact on Golden Delicious, Granny Smith, and Gala sales, but a negative impact on Red Delicious sales. Color ads, though, were only found to significantly influence Red Delicious sales. The use of a logo had no impact on apple sales.