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Effect of distance of transportation on willingness to pay for food

Author

Listed:
  • Grebitus, Carola
  • Lusk, Jayson L.
  • Nayga, Rodolfo M.

Abstract

Consumers' interest in locally produced foods is increasing. Hence, there is a need to decipher and quantify consumers' desire for local foods and understand the underlying causes of this demand. More specifically, we examine in this paper the issue of distance of transportation and its' impact on consumer preferences. We investigate how consumers' willingness to pay (WTP) for food varies with the distance the food traveled. Results from non-hypothetical second-price auctions indicate that average WTP is falling in distance traveled, indicating a preference for local production. Results also indicate that the marginal value of a mile traveled depends on the type of food studied (apples vs. wine). Socio-demographic characteristics, perceptions of freshness, taste and food safety, as well as support of local economy impact WTP for local foods.

Suggested Citation

  • Grebitus, Carola & Lusk, Jayson L. & Nayga, Rodolfo M., 2013. "Effect of distance of transportation on willingness to pay for food," Ecological Economics, Elsevier, vol. 88(C), pages 67-75.
    • Handle: RePEc:eee:ecolec:v:88:y:2013:i:c:p:67-75
    DOI: 10.1016/j.ecolecon.2013.01.006
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    More about this item

    Keywords

    Local food; Food miles; New Ecological Paradigm; Experimental auction; Non-hypothetical Vickrey auctions;
    All these keywords.

    JEL classification:

    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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