Do farm operators benefit from direct to consumer marketing strategies? |
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Authors: | Timothy Park Ashok K Mishra Shawn J Wozniak |
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Institution: | 1. FED/ ERS/ USDA, , Washington, DC, 20520‐1800 USA;2. Department of Agricultural Economics and Agribusiness, Louisiana State University AgCenter, Louisiana State University, , Baton Rouge, LA, 70803 USA;3. USAID/Peru/Alternative Development, Avenida La Encalada cdra. 17 s/n, Surco, , Peru |
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Abstract: | Using farm‐level data this study investigates factors associated with the choice of three direct marketing strategies (DMSs). Particular attention is given to the role of management and marketing skills in selection of DMSs. Additionally, the study applies a selectivity‐based approach for the multinomial logit model to assess the relationship between DMSs and the financial performance of the business. Results suggest that both management and marketing skills significantly affect direct‐to‐consumer sales. Farmers choosing the strategy of sales only through direct‐to‐consumer outlets report earnings that are significantly lower than earnings from the other marketing strategies. Marketing skills prove to be beneficial to direct‐to‐consumer (DTC) earnings. Finally, the selectivity correction terms in the direct sales model are significantly negative in the choice of DTC, indicating the presence of sample selection effects. Accounting for selectivity is essential to ensure unbiased and consistent estimates. |
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Keywords: | Direct marketing outlets Multinomial logit Farm sales Selectivity correction C25 Q12 Q13 Q16 |
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