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An experimental approach to valuing new differentiated products

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

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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Article provided by Blackwell in its journal Agricultural Economics.

Volume (Year): 31 (2004)
Issue (Month): 2-3 (December)
Pages: 317-325

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Handle: RePEc:eee:agecon:v:31:y:2004:i:2-3:p:317-325
Contact details of provider: Web page: http://www.blackwell-synergy.com/loi/agec

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  25. repec:cup:cbooks:9780521855167 is not listed on IDEAS
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