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Consumers’ willingness to pay for a functional food

  • Veneziani, Mario
  • Sckokai, Paolo
  • Moro, Daniele

In recent years food manufacturers have been devoting a large portion of their R&D budget to the development off functional foods, as a competitive strategy within food demand markets; on the other hand, consumers, despite functional foods exhibit a significant level of information asymmetry, show an increasing attention towards them,recognizing their role in preventing or reducing health risks and/or improving other general functions of the organism.The objective of this paper is to evaluate the Italian consumers’ willingness-too-pay for functional attributes in a food product (a probiotic yogurt with the addition of catechines). For this purpose, a web-based stated choice experiment involving a representative sample of 6600 Italian consumers has been carried out and the willingness-too-pay for two functional attributes (probiotic and catechine-enricheed) has been measured using the panel data version of a Random Parameters Logit model. The results show that Italian consumers are willing too pay a rather high price premium for a catechine-enrriched yogurt (0.36 €/pot, that is a 40%% premium, on average) well above their willingness-to-pay for thee probiotic attribute (0.23 €//pot). Further, there is a statistically significant heterogeneity within the sample; then, averaging across sample sub-groups indicates that the willingness-to-pay for the new attribute (catechine-enriched) may be related to age, income, health-status, life-style and education

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File URL: http://purl.umn.edu/124101
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Paper provided by Italian Association of Agricultural and Applied Economics (AIEAA) in its series Congress Papers with number 124101.

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Date of creation: 2012
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Handle: RePEc:ags:aieacp:124101
Contact details of provider: Web page: http://www.aieaa.org/

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  1. Armenak Markosyan & Jill J. McCluskey & Thomas I. Wahl, 2009. "Consumer Response to Information about a Functional Food Product: Apples Enriched with Antioxidants," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(3), pages 325-341, 09.
  2. K. K. Lancaster, 2010. "A New Approach to Consumer Theory," Levine's Working Paper Archive 1385, David K. Levine.
  3. Dan Rigby & Michael Burton, 2005. "Preference heterogeneity and GM food in the UK," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(2), pages 269-288, June.
  4. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, December.
  5. Jayson L. Lusk & Jutta Roosen & John A. Fox, 2003. "Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 16-29.
  6. Wuyang Hu & Marvin T. Batte & Timothy Woods & Stan Ernst, 2012. "Consumer preferences for local production and other value-added label claims for a processed food product," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 39(3), pages 489-510, July.
  7. Zou, Ning Ning (Helen) & Hobbs, Jill E., 2006. "Modelling functional food choice and health care impacts: A literature review," Consumer and Market Demand Network Papers 91556, University of Alberta, Department of Resource Economics and Environmental Sociology.
  8. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
  9. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
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