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Consumer Willingness To Pay For Domestic Milk

  • Vandermersch, Mieke
  • Mathijs, Erik

Dairy farmers'’ profit margins are under pressure due to the downward trend of EU commodity prices for fluid milk and the increasingly powerful retail sector, in combination with increasing production costs. A likely solution to counter small margins is to add value to raw milk. This paper investigates the option of using a domestic origin-certification to upgrade the value of milk. Data stem from a consumer survey, conducted at the three largest supermarket chains in Flanders (Belgium). The results show evidence for a latent demand for domestic milk. Based on actually purchased brands in combination with top-of-mind attributes, two consumer types were distinguished (price-shoppers and added-value seekers), each with a different behaviour concerning domestic milk. Socio-demographic, attitudinal and behavioural variables were found to influence the probability that a consumer is willing to pay a premium for domestic origin-certified milk. But, the influence of these variables differed between both consumer types as well as when a different bid level was proposed.

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File URL: http://purl.umn.edu/31829
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Paper provided by Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics in its series Working Papers with number 31829.

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Date of creation: 2004
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Handle: RePEc:ags:kucawp:31829
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  1. Paul W. Dobson & Michael Waterson & Stephen W. Davies, 2003. "The Patterns and Implications of Increasing Concentration in European Food Retailing," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 111-125.
  2. Frykblom, Peter, 1997. "Hypothetical Question Modes and Real Willingness to Pay," Journal of Environmental Economics and Management, Elsevier, vol. 34(3), pages 275-287, November.
  3. Alessandro Bonanno & Rigoberto A. Lopez, 2004. "Private Labels, Retail Configuration, and Fluid Milk Prices," Food Marketing Policy Center Research Reports 082, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  4. Verbeke, Wim & Ward, Ronald W., 2003. "Importance of EU Label Requirements: An Application of Ordered Probit Models to Belgium Beef Labels," 2003 Annual meeting, July 27-30, Montreal, Canada 22077, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Magnus Johannesson & Bengt Liljas & Per-Olov Johansson, 1998. "An experimental comparison of dichotomous choice contingent valuation questions and real purchase decisions," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 643-647.
  6. Loureiro, Maria L. & Umberger, Wendy J., 2002. "Estimating Consumer Willingness-To-Pay For Country Of-Origin-Labels For Beef Products," 2002 Annual meeting, July 28-31, Long Beach, CA 19745, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Levidow, L. & Bijman, J., 2002. "Farm inputs under pressure from the European food industry," Food Policy, Elsevier, vol. 27(1), pages 31-45, February.
  8. Jayson L. Lusk & Darren Hudson, 2004. "Willingness-to-Pay Estimates and Their Relevance to Agribusiness Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(2), pages 152-169.
  9. Maria Luz Loureiro & Jill J. McCluskey, 2000. "Assessing consumer response to protected geographical identification labeling," Agribusiness, John Wiley & Sons, Ltd., vol. 16(3), pages 309-320.
  10. Douglas Cooper, 2003. "Findings from the Competition Commission's Inquiry into Supermarkets," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 127-143.
  11. Christopher G. Leggett & Naomi S. Kleckner & Kevin J. Boyle & John W. Dufield & Robert Cameron Mitchell, 2003. "Social Desirability Bias in Contingent Valuation Surveys Administered Through In-Person Interviews," Land Economics, University of Wisconsin Press, vol. 79(4), pages 561-575.
  12. John Loomis & Armando Gonzalez-Caban & Robin Gregory, 1994. "Do Reminders of Substitutes and Budget Constraints Influence Contingent Valuation Estimates?," Land Economics, University of Wisconsin Press, vol. 70(4), pages 499-506.
  13. Kwamena K. Quagrainie & James Unterschultz & Michele Veeman, 1998. "Effects of Product Origin and Selected Demographics on Consumer Choice of Red Meats," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 46(2), pages 201-219, 07.
  14. Loureiro, Maria L. & Hine, Susan E., 2001. "Discovering Niche Markets: A Comparison Of Consumer Willingness To Pay For A Local (Colorado Grown), Organic, And Gmo-Free Product," 2001 Annual meeting, August 5-8, Chicago, IL 20630, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  15. Christopher D. Azevedo & Joseph A. Herriges & Catherine L. Kling, 2003. "Combining Revealed and Stated Preferences: Consistency Tests and Their Interpretations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 525-537.
  16. Loureiro, Maria L. & Umberger, Wendy J., 2004. "A Choice Experiment Model For Beef Attributes: What Consumer Preferences Tell Us," 2004 Annual meeting, August 1-4, Denver, CO 19931, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  17. Jekanowski, Mark D. & Williams, Daniel R., II & Schiek, William A., 2000. "Consumers' Willingness To Purchase Locally Produced Agricultural Products: An Analysis Of An Indiana Survey," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(1), April.
  18. Brooker, John R. & Eastwood, David B. & Orr, Robert H., 1987. "Consumers' Perceptions Of Locally Grown Produce At Retail Outlets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 18(1), February.
  19. Frode Alfnes, 2004. "Stated preferences for imported and hormone-treated beef: application of a mixed logit model," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(1), pages 19-37, March.
  20. repec:ccp:journl:v:54:y:2003:i:1:p:111-125 is not listed on IDEAS
  21. Cotterill, Ronald W. & Dhar, Tirtha Pratim, 2003. "Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel," Research Reports 25189, University of Connecticut, Food Marketing Policy Center.
  22. Huang, Ju-Chin & Haab, Timothy C. & Whitehead, John C., 1997. "Willingness to Pay for Quality Improvements: Should Revealed and Stated Preference Data Be Combined?," Journal of Environmental Economics and Management, Elsevier, vol. 34(3), pages 240-255, November.
  23. Baker, Gregory A. & Crosbie, Peter J., 1993. "Measuring Food Safety Preferences: Identifying Consumer Segments," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(02), December.
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