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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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  • Maynard, Leigh J. & Hartell, Jason G. & Meyer, A. Lee & Hao, Jianqiang, 2004. "An experimental approach to valuing new differentiated products," Agricultural Economics, Blackwell, vol. 31(2-3), pages 317-325, December.
  • Handle: RePEc:eee:agecon:v:31:y:2004:i:2-3:p:317-325
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    Cited by:

    1. Fischer, Anke & Hanley, Nicholas & Lowassa, Asanterabi & Milner-Gulland, Eleanor J & Moro, Mirko & Naiman, Loiruck C, 2014. "An investigation of the determinants of household demand for bushmeat in the Serengeti using an open-ended choice experiment," Stirling Economics Discussion Papers 2014-07, University of Stirling, Division of Economics.
    2. Rosas, Francisco & Acerenza, Santiago & Orazem, Peter, 2016. "Optimal pricing strategies for a cluster of goods: Own- and cross-price effects with correlated tastes," ISU General Staff Papers 201611300800001008, Iowa State University, Department of Economics.
    3. 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.
    4. Li, Hao & Elbakidze, Levan, 2016. "Application of Regression Discontinuity Approach in Experimental Auctions: A Case Study of Gaining Participants’ Trust and Their Willingness to Pay," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236149, Agricultural and Applied Economics Association.
    5. 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.
    6. 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).
    7. 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. 0(Number 2), pages 1-12, July.
    8. 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. 0(Number 2), pages 1-12, August.
    9. Leigh J. Maynard & Ellen Goddard & John Conley, 2008. "Impact of BSE on Beef Purchases in Alberta and Ontario Quick-Serve Restaurants," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(3), pages 337-351, September.

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