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Masked Heterogeneity in Aggregation: Incorporating Beliefs and Geographic Information into Consumer Willingness to Pay for State Brands

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  • Osburn, Meagan
  • Holcomb, Rodney B.
  • Neill, Clinton L.

Abstract

State marketing programs for food and agricultural products are largely driven by consumers’ desires to purchase in-state products. Evaluations of state marketing programs have largely ignored consumer location and proximity to surrounding states, measures of ethnocentrism, and the presence of other geographic marketing labels. This study examines willingness to pay for own and out-of-state labels for a generic commodity, milk, within an eight-state region. The results show that an aggregate model conceals consumer heterogeneity in marginal willingness to pay values for state brands as compared to a disaggregate model, even when using random parameter logit models.

Suggested Citation

  • Osburn, Meagan & Holcomb, Rodney B. & Neill, Clinton L., 2020. "Masked Heterogeneity in Aggregation: Incorporating Beliefs and Geographic Information into Consumer Willingness to Pay for State Brands," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 52(4), pages 527-544, November.
    • Handle: RePEc:cup:jagaec:v:52:y:2020:i:4:p:527-544_2
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    Cited by:

    1. Jasper Grashuis & Ye Su, 2022. "Inequality aversion and consumer ethnocentrism: Food consumer preferences for payoff distributions to farm producers," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 608-619, July.
    2. Grashuis, Jasper & Su, Ye, 2023. "Consumer Preferences for State-Sponsored Designations: The Case of the Missouri Grown Label," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(1), January.

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