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The importance of the origin of apple varieties: results from a discrete choice experiment in Portugal

Listed author(s):
  • Anabela Botelho

    ()

    (Universidade do Minho, NIMA)

  • Isabel Dinis
  • Lina Sofia Lourenço-Gomes

    ()

    (University of Trás-os-Montes and Alto Douro)

  • Jorge Moreira

    (CERNAS, Instituto Politécnico de Coimbra, Escola Superior Agrária de Coimbra)

  • Lígia Costa Pinto

    ()

    (Universidade do Minho, NIMA)

The increased depletion of biological diversity in agriculture can be attributed to the massification and standardization of production. Another argument is the often mentioned lower productivity of these varieties and the lack of a market price premium that compensates for these higher production cost. Policies to address this issue can either rest on market instruments or on command and control initiatives. The paper aims to determine the role that the origin of the apple variety plays in consumers’ choice, controlling for the place of production. Most literature analyzing the role of origin of production finds that national or local productions have a positive effect on consumers’ choices, receiving a positive price premium. However, appellation of origin has, to our knowledge, never been analyzed in the fruit market. Determining, in a controlled design, whether the Portuguese traditional variety has a positive price premium and characterizing the socio-economic characteristics of consumers valuing this attribute the most can provide valuable insights for apple producers and policy makers. It can help designing more effective strategies to increase market shares or identifying market niches for producers and to promote agro-biodiversity more effective by policy makers. Our results indicate that consumers are willing to pay a statistically significant price premium for the national varieties. In addition, consumers that value the national variety, on average, buy larger quantities and buy more frequently, buy specific varieties, are more aware of products characteristics and are on average older. These results are encouraging for policy makers as they demonstrate the potential for policies based on market instruments as consumers are responsive to price. In addition, the analysis of consumers’ heterogeneity typifies the segments that are more willing to buy national varieties. Finally, the results also indicate, to apple producers and marketers, possible ways to increase their market shares by identifying the socio-demographic characteristics of consumers more willing to buy national varieties at higher prices that may compensate for the increased costs of production.

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Paper provided by Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho in its series NIMA Working Papers with number 54.

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Length: 15 pages
Date of creation: Dec 2013
Handle: RePEc:nim:nimawp:54/2013
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References listed on IDEAS
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  1. Jason A. Winfree & Jill J. McCluskey, 2005. "Collective Reputation and Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 206-213.
  2. Jean Philippe Perrouty & François d'Hauteville & Larry Lockshin, 2006. "The influence of wine attributes on region of origin equity: An analysis of the moderating effect of consumer's perceived expertise," Agribusiness, John Wiley & Sons, Ltd., vol. 22(3), pages 323-341.
  3. Adalja, Aaron & Hanson, James & Towe, Charles & Tselepidakis, Elina, 2015. "An Examination of Consumer Willingness to Pay for Local Products," Agricultural and Resource Economics Review, Cambridge University Press, vol. 44(03), pages 253-274, December.
  4. Anabela Botelho & Lina Sofia Lourenço-Gomes & Lígia Costa Pinto, 2013. "Consumer preferences for apple: Comparing the results of contingent valuation method and a real purchasing situation," NIMA Working Papers 51, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  5. Boccaletti, Stefano & Nardella, Michele, 2000. "Consumer Willingness To Pay For Pesticide-Free Fresh Fruit And Vegetables In Italy," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 3(03).
  6. Klaus G. Grunert, 2005. "Food quality and safety: consumer perception and demand," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(3), pages 369-391, September.
  7. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
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