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Choosing Brands: Fresh Produce versus Other Products

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  • Yanhong H. Jin
  • David Zilberman
  • Amir Heiman

Abstract

Assuming that brands contribute to quality risk reduction, prestige, and design, we derive and test hypothesis on the willingness to pay (WTP) for brands across different product categories (electronics, clothing, packaged food, and fresh produce). Using the random effect tobit model on the stated point value of WTP and the ordered probit model on the stated range of WTP, we find that WTP for brands of fresh produce is least among the four product categories controlling for relevant demographic variations. Simulations show that fresh produce has a higher optimal price premium for brands but with a much smaller market share. Copyright 2008, Oxford University Press.

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File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01062.x
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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 90 (2008)
Issue (Month): 2 ()
Pages: 463-475

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Handle: RePEc:oup:ajagec:v:90:y:2008:i:2:p:463-475

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  1. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
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  5. David Buschena & Vincent Smith, 2005. "Do Voluntary Biotechnology Labels Matter to the Consumer? Evidence from the Fluid Milk Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 378-392.
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Cited by:
  1. Jin, Yanhong H. & Lin, Liguo & Yao, Lan, 2011. "Do Consumers Trust the National Inspection Exemption Brands? Evidence from Infant Formula in China," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103766, Agricultural and Applied Economics Association.
  2. He, Na & Bernard, John C., 2011. "Differences in WTP and Consumer Demand for Organic and Non-GM Fresh and Processed Foods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(2), August.
  3. Devkota, Nirmala & Paudel, Krishna P. & Parajuli, Shanta, 2009. "Broiler Producers’ Willingness To Pay To Manage Nutrient Pollution," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46825, Southern Agricultural Economics Association.
  4. Rickard, Bradley J. & Schmit, Todd M. & Gomez, Miguel I. & Lu, Hao, 2011. "Does the Name Matter? Developing Brands for Patented Fruit Varieties," Working Papers 126603, Cornell University, Department of Applied Economics and Management.
  5. Martinez, Stephen W., 2011. "Brand Premiums in the U.S. Beef Industry," Journal of Food Distribution Research, Food Distribution Research Society, vol. 42(2), July.
  6. Morales, Luis Emilio & Fleming, Euan M. & Wright, Vic & Griffith, Garry R. & Umberger, Wendy J., 2008. "Product And Branding Innovations In The Australian Beef Marketing System," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 5993, Australian Agricultural and Resource Economics Society.

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