IDEAS home Printed from https://ideas.repec.org/p/ags/aaea05/19366.html
   My bibliography  Save this paper

Factors Affecting Consumer Choice and Willingness to Pay for Milk Attributes

Author

Listed:
  • Bernard, Daria J.
  • Mathios, Alan D.

Abstract

This study used weekly scanner data to determine within the milk market the factors that affect consumer choice of non-rBST and organic products and the implications for the development of niche markets. This was accomplished by first understanding what product attributes affected demand for milk and then determining how much consumers were willing to pay for these attributes. The former was done within the multinomial logit framework while the latter used the hedonic price model to infer WTP. Results showed the price effect for rBST-free was the largest while the price effect for organic was the smallest and that consumers were willing to pay more for both rBST-free and organic milk compared to conventionally produced milk.

Suggested Citation

  • Bernard, Daria J. & Mathios, Alan D., 2005. "Factors Affecting Consumer Choice and Willingness to Pay for Milk Attributes," 2005 Annual meeting, July 24-27, Providence, RI 19366, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19366
    DOI: 10.22004/ag.econ.19366
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/19366/files/sp05be05.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.19366?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. McGuirk, Anya M. & Preston, Warren P. & Jones, Gerald M., 1992. "Introducing Foods Produced Using Biotechnology: The Case Of Bovine Somatotropin," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(1), pages 1-15, July.
    2. Robert C. Blattberg & Richard Briesch & Edward J. Fox, 1995. "How Promotions Work," Marketing Science, INFORMS, vol. 14(3_supplem), pages 122-132.
    3. McGuirk, Anya M. & Preston, Warren P. & Jones, Gerald M., 1992. "Introducing Foods Produced Using Biotechnology: The Case Of Bovine Somatotropin," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(1), pages 209-223, July.
    4. Dimitri, Carolyn & Greene, Catherine R., 2002. "Recent Growth Patterns In The U.S. Organic Foods Market," Agricultural Information Bulletins 33715, United States Department of Agriculture, Economic Research Service.
    5. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-1240, September.
    6. Mathios, Alan D, 2000. "The Impact of Mandatory Disclosure Laws on Product Choices: An Analysis of the Salad Dressing Market," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 651-677, October.
    7. Dhar, Tirtha Pratim & Foltz, Jeremy D., 2003. "Market Structure And Consumer Valuation In The Rbst-Free And Organic Milk Markets," 2003 Annual meeting, July 27-30, Montreal, Canada 22177, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Blayney, Don P. & Fallert, Richard F., 1990. "Biotechnology and Agriculture: Emergence of Bovine Somatotropin (bST)," Staff Reports 278330, United States Department of Agriculture, Economic Research Service.
    9. Mathios, Alan D., 1998. "The Importance Of Nutrition Labeling And Health Claim Regulation On Product Choice: An Analysis Of The Cooking Oils Market," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), pages 1-10, October.
    10. Kaiser, Harry M. & Scherer, Clifford W. & Barbano, David M., 1992. "Consumer Perceptions And Attitudes Towards Bovine Somatotropin," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 21(1), pages 1-11, April.
    11. Green, Geoffrey M. & Park, John L., 1998. "New Insights Into Supermarket Promotions Via Scanner Data Analysis: The Case Of Milk," Journal of Food Distribution Research, Food Distribution Research Society, vol. 29(3), pages 1-10, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mbabazi, Esther Gloria, 2016. "Cost Effectiveness Of And Willingness To Pay For Vaccination Of Village Free-Range Poultry Against Newcastle Disease In Iganga District," Research Theses 265577, Collaborative Masters Program in Agricultural and Applied Economics.
    2. Kecinski, Maik & Messer, Kent D. & Peo, Audrey J., 2018. "When Cleaning Too Much Pollution Can Be a Bad Thing: A Field Experiment of Consumer Demand for Oysters," Ecological Economics, Elsevier, vol. 146(C), pages 686-695.
    3. Jura Liaukonyte & Nadia A. Streletskaya & Harry M. Kaiser, 2015. "The Long-Term Impact of Positive and Negative Information on Food Demand," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(4), pages 539-562, December.
    4. Pedro A. Alviola & Oral Capps, 2010. "Household demand analysis of organic and conventional fluid milk in the United States based on the 2004 Nielsen Homescan panel," Agribusiness, John Wiley & Sons, Ltd., vol. 26(3), pages 369-388.
    5. Mbabazi, Esther Gloria, 2016. "Cost Effectiveness Of And Willingness To Pay For Vaccination Of Village Free-Range Poultry Against Newcastle Disease In Iganga District," Research Theses 276434, Collaborative Masters Program in Agricultural and Applied Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Loren W. Tauer, 1994. "The value of segmenting the milk market into bST-Produced and Non-bST-Produced milk," Agribusiness, John Wiley & Sons, Ltd., vol. 10(1), pages 3-12.
    2. Villas-Boas, Sofia B & Taylor, Rebecca & Krovetz, Hannah, 2016. "Willingness to Pay for Low Water Footprint Food Choices During Drought," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9vh3x180, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Hudson, Darren & Jones, Tom, 2001. "Willingness to Plant Identity Preserved Crops: The Case of Mississippi Soybeans," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(3), pages 475-485, December.
    4. Green, Kesten C. & Armstrong, J. Scott, 2012. "Evidence on the effects of mandatory disclaimers in advertising," MPRA Paper 37766, University Library of Munich, Germany.
    5. Allender, William J. & Richards, Timothy J., 2012. "Brand Loyalty and Price Promotion Strategies: An Empirical Analysis," Journal of Retailing, Elsevier, vol. 88(3), pages 323-342.
    6. Lydia Zepeda & Robin Douthitt & So‐Ye You, 2003. "Consumer Risk Perceptions Toward Agricultural Biotechnology, Self‐Protection, and Food Demand: The Case of Milk in the United States," Risk Analysis, John Wiley & Sons, vol. 23(5), pages 973-984, October.
    7. Caswell, Margriet F. & Fuglie, Keith O. & Klotz, Cassandra A., 1994. "Agricultural Biotechnology: An Economic Perspective," Agricultural Economic Reports 262025, United States Department of Agriculture, Economic Research Service.
    8. Sukant Misra & Donna Grotegut & Kyle Clem, 1997. "Consumer attitude toward Recombinant Porcine Somatotropin," Agribusiness, John Wiley & Sons, Ltd., vol. 13(1), pages 11-20.
    9. Deana Grobe & Robin Douthitt & Lydia Zepeda, 1999. "A Model of Consumers' Risk Perceptions Toward Recombinant Bovine Growth Hormone (rbGH): The Impact of Risk Characteristics," Risk Analysis, John Wiley & Sons, vol. 19(4), pages 661-673, August.
    10. Hine, Susan E. & Loureiro, Maria L., 2002. "Understanding Consumers' Perceptions Toward Biotechnology And Labeling," 2002 Annual meeting, July 28-31, Long Beach, CA 19898, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Rosemary Avery & Donald Kenkel & Dean Lillard & Alan Mathios, 2007. "Regulating advertisements: the case of smoking cessation products," Journal of Regulatory Economics, Springer, vol. 31(2), pages 185-208, April.
    12. Gillespie, Jeffrey M. & Nehring, Richard F. & Hallahan, Charles B. & Morrison Paul, Catherine J. & Sandretto, Carmen L., 2008. "Economics and Productivity of Organic versus Non-organic Dairy Farms in the United States," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44415, European Association of Agricultural Economists.
    13. Rebecca Cleary & Rigoberto Lopez, 2014. "Supermarket responses to Wal-Mart Supercenter expansion: a structural approach," Empirical Economics, Springer, vol. 47(3), pages 905-925, November.
    14. Canessa, Carolin & Venus, Terese E. & Wiesmeier, Miriam & Mennig, Philipp & Sauer, Johannes, 2023. "Incentives, Rewards or Both in Payments for Ecosystem Services: Drawing a Link Between Farmers' Preferences and Biodiversity Levels," Ecological Economics, Elsevier, vol. 213(C).
    15. Susan Feng Lu, 2012. "Multitasking, Information Disclosure, and Product Quality: Evidence from Nursing Homes," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(3), pages 673-705, September.
    16. Pereira, Pedro & Ribeiro, Tiago, 2011. "The impact on broadband access to the Internet of the dual ownership of telephone and cable networks," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 283-293, March.
    17. Chen Zhou & Shrihari Sridhar & Rafael Becerril-Arreola & Tony Haitao Cui & Yan Dong, 2019. "Promotions as competitive reactions to recalls and their consequences," Journal of the Academy of Marketing Science, Springer, vol. 47(4), pages 702-722, July.
    18. David R. Bell & Jeongwen Chiang & V. Padmanabhan, 1999. "The Decomposition of Promotional Response: An Empirical Generalization," Marketing Science, INFORMS, vol. 18(4), pages 504-526.
    19. Gauri, Dinesh Kumar & Trivedi, Minakshi & Grewal, Dhruv, 2008. "Understanding the Determinants of Retail Strategy: An Empirical Analysis," Journal of Retailing, Elsevier, vol. 84(3), pages 256-267.
    20. T.R.L. Fry & R.D. Brooks & Br. Comley & J. Zhang, 1993. "Economic Motivations for Limited Dependent and Qualitative Variable Models," The Economic Record, The Economic Society of Australia, vol. 69(2), pages 193-205, June.

    More about this item

    Keywords

    Consumer/Household Economics;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea05:19366. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.