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Substitutes or Complements? Consumer Preference for Local and Organic Food Attributes

Author

Listed:
  • Thong Meas
  • Wuyang Hu
  • Marvin T. Batte
  • Timothy A. Woods
  • Stan Ernst

Abstract

This research examines consumer preference and compares their willingness-to-pay for a host of value-added attributes of processed blackberry jam, and focuses on various organic and local production location designations. Instead of being treated as a binary attribute, three levels of USDA organic are considered: 100% organic, at least 95% organic, and made with organic ingredients (at least 70% organic). For local production, three levels are also included in the analysis: cross-state region (the Ohio Valley), state boundary (state-proud logos), as well as sub-state regions. Stated-preference data collected from a choice experiment in a mail survey in Kentucky and Ohio are used. Results from the study confirm positive willingness-to-pay for both organic and local attributes. However, consumers were willing to pay comparatively more for jam produced locally in regions smaller than the border of a state compared to organic jam. Furthermore, substitution and complementary effects between food attributes were investigated. The study found strong substitution effects between organic and local production claims, an issue that has thus far received minimal treatment in the existing literature on organic and local food willingness-to-pay studies. The results indicate a large degree of overlapping values in the willingness-to-pay for these two food attributes. In addition, the "small farm" attribute considered in the study also appears to be a substitute for organic and local attributes, which confirms the previous belief that one of the many reasons consumers purchase organic or local products is to support small or family-owned farms.

Suggested Citation

  • Thong Meas & Wuyang Hu & Marvin T. Batte & Timothy A. Woods & Stan Ernst, 2015. "Substitutes or Complements? Consumer Preference for Local and Organic Food Attributes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(4), pages 1044-1071.
  • Handle: RePEc:oup:ajagec:v:97:y:2015:i:4:p:1044-1071.
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    File URL: http://hdl.handle.net/10.1093/ajae/aau108
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    Cited by:

    1. Koen Schoors & Maria Semenova & Andrey Zubanov, 2016. "Depositor Discipline in Russian Regions: Flight to Familiarity or Trust in Local Authorities?," HSE Working papers WP BRP 58/FE/2016, National Research University Higher School of Economics.
    2. Yonezawa, Koichi & Richards, Timothy J., 2016. "Risk Aversion and Preference for Store Price Format," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-23.
    3. Bazzani, Claudia & Gustavsen, Geir W. & Nayga, Rodolfo M. Jr. & Rickertsen, Kyrre, 2016. "Are Consumers’ Preferences for Food Values in the U.S. and Norway Similar? A Best-Worst Scaling Approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235844, Agricultural and Applied Economics Association.
    4. Meemken, Eva-Marie & Veettil, Prakashan Chellattan & Qaim, Matin, 2016. "Small farmers’ preferences for the design of certification schemes: Does gender matter?," GlobalFood Discussion Papers 235484, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    5. Ratliff, English & Vassalos, Michael & Hu, Wuyang, 2017. "Assessing the Influence of Tangible and Intangible Seafood Characteristics on Consumers’ Purchasing Decisions," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252848, Southern Agricultural Economics Association.
    6. repec:eee:ecolec:v:152:y:2018:i:c:p:161-171 is not listed on IDEAS
    7. Michael Vassalos & Zhifeng Gao & Lisha Zhang, 2017. "Factors Affecting Current and Future CSA Participation," Sustainability, MDPI, Open Access Journal, vol. 9(3), pages 1-16, March.
    8. Jana Schwarz & Monica Schuster & Bernd Annaert & Miet Maertens & Erik Mathijs, 2016. "Sustainability of Global and Local Food Value Chains: An Empirical Comparison of Peruvian and Belgian Asparagus," Sustainability, MDPI, Open Access Journal, vol. 8(4), pages 1-22, April.
    9. repec:uwp:landec:v:95:y:2019:i:4:p:494-514 is not listed on IDEAS
    10. repec:kap:enreec:v:68:y:2017:i:4:d:10.1007_s10640-016-0057-8 is not listed on IDEAS
    11. Zack Dorner & Daniel A. Brent & Anke Leroux, 2019. "Preferences for Intrinsically Risky Attributes," Land Economics, University of Wisconsin Press, vol. 95(4), pages 494-514.
    12. Costanigro, Marco & Scozzafava, Gabriele & Casini, Leonardo, 2017. "Vertical Differentiation, Perceptions Restructuring, And Wine Choices: The Case Of The Gran Selezione In Chianti Wines," Working Papers 253850, American Association of Wine Economists.
    13. repec:ags:jlaare:276500 is not listed on IDEAS
    14. repec:wly:agribz:v:34:y:2018:i:4:p:714-727 is not listed on IDEAS
    15. repec:eee:finsta:v:43:y:2019:i:c:p:25-39 is not listed on IDEAS
    16. McFadden, Jonathan R. & Huffman, Wallace E., 2017. "Willingness-to-pay for natural, organic, and conventional foods: The effects of information and meaningful labels," Food Policy, Elsevier, vol. 68(C), pages 214-232.
    17. Grebitus, Carola & Printezis, Iryna & Printezis, Antonios, 2017. "Relationship between Consumer Behavior and Success of Urban Agriculture," Ecological Economics, Elsevier, vol. 136(C), pages 189-200.
    18. Ha, Kim & Atallah, Shadi S. & Bazzani, Claudia & Nayga, Rodolfo M., 2017. "Consumers’ Valuation for Craft Beer: Does the Localness of Inputs Matter?," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258330, Agricultural and Applied Economics Association.
    19. Koen Schoors & Maria Semenova & Andrey Zubanov, 2019. "Depositor Discipline During Crisis: Flight To Familiarity Or Trust In Local Authorities?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 19/959, Ghent University, Faculty of Economics and Business Administration.

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