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Are Local and Organic Claims Complements or Substitutes? A Consumer Preferences Study for Eggs

Author

Listed:
  • Azucena Gracia
  • Jesús Barreiro-Hurlé
  • Belinda López- Galán

Abstract

type="main" xml:id="jage12036-abs-0001"> This paper provides an analysis of consumer preferences for product claims, specifically about origin and production methods. In particular, it addresses two important questions: i) whether consumers are willing to pay a premium for food products carrying these claims; and ii) whether local and organic claims are complements or substitutes. A choice experiment designed to estimate two-way interactions was undertaken in Spain for eggs. The findings show first, that consumers are willing to pay a positive premium price for an enhanced method of production (that of barn, free-range and/or organic instead of cage produced eggs) as well as for the proximity of production (local, regional and national over imported). Second, the findings show that consumer preferences for the claims are heterogeneous with two consumer segments being identified: “origin preference”, the larger segment, and the “production method preference”. Results show that organic and local claims were complements for the larger first segment but that free-range and local/regional claims were substitutes for the second smaller segment. These results provide the marketing chains with insights applicable for pricing strategies.

Suggested Citation

  • Azucena Gracia & Jesús Barreiro-Hurlé & Belinda López- Galán, 2014. "Are Local and Organic Claims Complements or Substitutes? A Consumer Preferences Study for Eggs," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(1), pages 49-67, January.
  • Handle: RePEc:bla:jageco:v:65:y:2014:i:1:p:49-67
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    File URL: http://hdl.handle.net/10.1111/jage.2014.65.issue-1
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    Citations

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    Cited by:

    1. Penn, Jerrod & Hu, Wuyang, 2016. "Making the Most of Cheap Talk in an Online Survey," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236171, Agricultural and Applied Economics Association.
    2. repec:eee:ecolec:v:152:y:2018:i:c:p:161-171 is not listed on IDEAS
    3. Eva Tebbe & Korbinian von Blanckenburg, 2018. "Does willingness to pay increase with the number and strictness of sustainability labels?," Agricultural Economics, International Association of Agricultural Economists, vol. 49(1), pages 41-53, January.
    4. repec:eee:eejocm:v:28:y:2018:i:c:p:10-27 is not listed on IDEAS
    5. repec:kap:enreec:v:68:y:2017:i:4:d:10.1007_s10640-016-0057-8 is not listed on IDEAS
    6. Shi, Wei & Halstead, John & Huang, Ju-Chin, 2016. "Consumers’ Willingness to Pay for Locally Grown Produce: Comparison of New Hampshire and Massachusetts Results," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236109, Agricultural and Applied Economics Association.
    7. 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), pages 1-20, April.
    8. Francesca Gerini & Frode Alfnes & Alexander Schjøll, 2016. "Organic- and Animal Welfare-labelled Eggs: Competing for the Same Consumers?," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(2), pages 471-490, June.
    9. Didier Laussel, 2018. "Strategic Product Design under Duopoly," Annals of Economics and Statistics, GENES, issue 131, pages 25-44.
    10. Heng, Yan & Peterson, Hikaru Hanawa & Li, Xianghong, 2016. "Consumer Responses to Multiple and Superfluous Labels in the Case of Eggs," Journal of Food Distribution Research, Food Distribution Research Society, vol. 47(2), pages 1-21, July.
    11. Caputo, Vincenzina & Scarpa, Riccardo & Nayga, Rodolfo M. & Ortega, David L., 2018. "Are preferences for food quality attributes really normally distributed? An analysis using flexible mixing distributions," Journal of choice modelling, Elsevier, vol. 28(C), pages 10-27.

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