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Product Differentiation and Market Segmentation in Applesauce: Using a Choice Experiment to Assess the Value of Organic, Local and Nutrition Attributes

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  • James, Jennifer S.
  • Rickard, Bradley J.
  • Rossman, William J.
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    Abstract

    Recently there is much interest among horticultural producers concerning the marketing of organically- and locally- produced food. Here we developed a consumer survey that asked respondents to choose an applesauce product from a list of products differentiated by price and four attributes. The products were differentiated by labels that described fat content, nutrition content, and whether the product was grown organically and/or locally. The survey was distributed to 3,000 residents in rural Pennsylvania and over 1,500 responses were collected yielding a response rate of 56%. Survey results were used to assess consumers’ willingness to pay for the product attributes in applesauce, and we found that consumers were willing to pay more for locally-grown applesauce compared to applesauce that was labeled organic or low fat and low sugar. Furthermore, the analysis incorporated the effects of consumer characteristics on the demand for applesauce attributes and we find evidence that increased knowledge of agriculture decreases the willingness to pay for organically- and locally-grown applesauce.

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    Bibliographic Info

    Paper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 48916.

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    Date of creation: Jan 2009
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    Handle: RePEc:ags:cudawp:48916

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    Related research

    Keywords: Applesauce; Choice experiment; Consumer demand; Fruit and vegetable markets; Locally grown; Multinomial logit model; Organic; Pennsylvania; Willingness to pay; Agribusiness; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Q13;

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    Cited by:
    1. Wirth, Ferdinand F. & Stanton, John L. & Wiley, James B., 2011. "The Relative Importance of Search versus Credence Product Attributes: Organic and Locally Grown," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(1), April.
    2. Azucena Gracia, 2014. "Consumers’ preferences for a local food product: a real choice experiment," Empirical Economics, Springer, vol. 47(1), pages 111-128, August.
    3. Martinez, Stephen W. & Hand, Michael S. & Da Pra, Michelle & Pollack, Susan L. & Ralston, Katherine L. & Smith, Travis A. & Vogel, Stephen J. & Clark, Shellye & Lohr, Luanne & Low, Sarah A. & Newman, , 2010. "Local Food Systems: Concepts, Impacts, and Issues," Economic Research Report 96635, United States Department of Agriculture, Economic Research Service.
      • Martinez, Steve & Hand, Michael & Da Pra, Michelle & Pollack, Susan & Ralston, Katherine & Smith, Travis & Vogel, Stephen & Clarke, Shellye & Lohr, Luanne & Low, Sarah & Newman, Constance, 2010. "Local food systems: concepts, impacts, and issues," MPRA Paper 24313, University Library of Munich, Germany.
    4. Costanigro, Marco & Kroll, Stephan & Thilmany, Dawn D. & Bunning, Marisa, 2010. "Do Taste Buds Trump Labels and Information? A Sensory Test and Economic Experiment on Organic and Local Apples," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61668, Agricultural and Applied Economics Association.
    5. Lefèvre, Mélanie, 2014. "Do Consumers Pay More for What They Value More? The Case of Local Milk-based Dairy Products in Senegal," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), April.
    6. Perla, Joseph M. & Rickard, Bradley J. & Schmit, Todd M., 2014. "Looking for Locapours: Using Zagat Survey Data to Examine Restaurant Demand for Local Wine," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), April.

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