An economic evaluation of the effectiveness of the Texas Pecan Checkoff Program

The Texas Pecan Board was established in 1998 to administer the Texas Pecan Checkoff Program and is financed through a one-half cent per pound assessment on grower pecan sales. The Board spends the assessment collections on a variety of advertising campaigns in an attempt to expand demand for Texas pecans, both improved and native varieties, and increase the welfare of Texas pecan growers. This study presents an evaluation of the economic effectiveness of the Texas Pecan Checkoff Program in expanding sales of Texas pecans. First, the effects of Texas Pecan Board promotion on sales of all Texas pecans are determined using the ordinary least squares estimator (OLS) followed by a test for differential effects of Texas Pecan Board promotion on sales of improved and native Texas pecan varieties using the seemingly unrelated regression. The analysis indicates that the Texas Pecan Checkoff Program has effectively increased sales of improved varieties of Texas pecans, but has had no impact on sales of native varieties of Texas pecans. A benefit-cost analysis determines that the additional sales revenues generated is relatively large compared to the dollar value spent on promotion indicating that the Texas pecan promotion program has been financially successful.