Does a 'Buy Local' Campaign Affect the Demand for Local Products?
Our research question is as follows, “Does a 'Buy local' campaign affect the demand for local products?” It is important to determine the relationship between 'Buy Local' campaigns and demand because increasing the demand for products produced locally is expected to have a positive impact on the regional economy. In recent years consumers are demanding more local products as society becomes more environmentally conscious. 'Buy Local' campaigns attempt to capitalize on that shift in consumer preferences by creating niche markets for locally produced goods. According to economic theory, this type of advertising is one means by which firms can differentiate their product, allowing them to sell more of their goods at a higher price. An increase in demand for local products can help produce jobs in the region, which can cause a snowball effect, increasing consumption and further boosting employment. In this study, we present an econometric analysis in which we determine the effect of a ‘Buy Local’ campaign on the demand for several local products.