A 2-STAGE ANALYSIS OF THE EFFECTIVENESS OF PROMOTION PROGRAMS FOR US APPLES

Export promotion programs are intended to help U.S. exporters enter, m aintain, and expand foreign markets, but little is known of their succ ess in achieving each of these goals. In this paper we attempt to dete rmine the effectiveness of export promotion in increasing both U.S. ma rket share and total import consumption using apple imports by Singapo re and the United Kingdom as case studies. Estimates of a two-stage Li near Expenditure System (LES)/Almost Ideal Demand System (AIDS) model show that promotion increases consumption of apples in both the United Kingdom and Singapore, but increases U.S. market share only in the Un ited Kingdom. The results suggest that free-riding on U.S. promotion c an be significant.