Product Differentiation and Market Segmentation in Applesauce: Using a Choice Experiment to Assess the Value of Organic, Local and Nutrition Attributes
AbstractRecently 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 InfoPaper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 48916.
Date of creation: Jan 2009
Date of revision:
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;
Find related papers by JEL classification:
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-05-02 (Agricultural Economics)
- NEP-ALL-2009-05-02 (All new papers)
- NEP-DCM-2009-05-02 (Discrete Choice Models)
- NEP-MKT-2009-05-02 (Marketing)
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- 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.
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