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An Experimental Approach To Valuing New Differentiated Products

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  • Maynard, Leigh J.
  • Hartell, Jason G.
  • Meyer, A. Lee
  • Hao, Jianqiang

Abstract

An experimental store was created to evaluate initial demand for locally-produced and guaranteed tender steak products as a more realistic alternative to contingent valuation (CV) and dichotomous-choice experimental methods. Strengths of the approach are incentive compatibility, a realistic consumption set, and a familiar choice environment. Consumers selected among USDA Choice, premium quality, lean, guaranteed tender, and locally-produced strip steaks. A double-hurdle count data model indicated initial willingness-to-pay for locally-produced steak comparable to prior CV results, but demand was highly elastic. Demand for premium quality steak crowded out demand for the guaranteed tender product, contrasting with prior dichotomous-choice experimental results.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa with number 25810.

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Date of creation: 2003
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Handle: RePEc:ags:iaae03:25810

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Keywords: Demand and Price Analysis;

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  1. Maynard, Leigh J. & Burdine, Kenneth H. & Meyer, A. Lee, 2003. "Market Potential for Locally Produced Meat Products," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(02), July.
  2. Mullahy, John, 1986. "Specification and testing of some modified count data models," Journal of Econometrics, Elsevier, vol. 33(3), pages 341-365, December.
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Cited by:
  1. Maynard, Leigh J. & Wang, Xin, 2009. "Context-Dependent BSE Impacts on Canadian Food-at-Home Beef Purchases," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 48431, Agricultural and Applied Economics Association.
  2. Silva, Andres & Nayga, Rodolfo M., Jr. & Campbell, Benjamin L. & Park, John L., 2011. "Revisiting Cheap Talk with New Evidence from a Field Experiment," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), August.
  3. Maynard, Leigh J. & Burdine, Kenneth H. & Meyer, A. Lee, 2003. "Market Potential for Locally Produced Meat Products," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(02), July.
  4. Avitia, Jessica & Costa-Font, Montserrat & Gil, Jose Maria & Lusk, Jayson L., 2011. "A Calibrate Auction-conjoint Experiment to Elicit Consumer Valuation of Sustainable Farming: Is Agro-systems Preservation Relevant?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114213, European Association of Agricultural Economists.
  5. Yan, Jiong & Barkmann, Jan & Marggraf, Rainer, 2007. "Chinese tourist preferences for nature based destinations: a choice experiment analysis," DARE Discussion Papers 0706, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).

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