Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-26T17:55:52.548Z Has data issue: false hasContentIssue false
  • English
  • Français

Product Differentiation and Market Segmentation in Applesauce: Using a Choice Experiment to Assess the Value of Organic, Local, and Nutrition Attributes

Published online by Cambridge University Press:  15 September 2016

Jennifer S. James ,
Bradley J. Rickard  and
William J. Rossman
Jennifer S. James
Affiliation:
Agribusiness Department at California Polytechnic State University in San Luis Obispo, California
Bradley J. Rickard
Affiliation:
Department of Applied Economics and Management at Cornell University in Ithaca, New York
William J. Rossman
Affiliation:
Department of Agricultural Economics and Rural Sociology at The Pennsylvania State University in University Park, Pennsylvania
Get access Rights & Permissions [Opens in a new window]

Abstract

Recently, there has been much interest among horticultural producers concerning the marketing of organic and locally produced food. A consumer survey was administered that asked respondents to choose an applesauce product from a list of products differentiated by price, and by labels that described fat content, nutrition content, and whether the product was grown organically and/or locally. Our analysis indicates that consumers were willing to pay more for locally grown applesauce compared to applesauce that was labeled USDA Organic, Low Fat, or No Sugar Added. Furthermore, we find evidence that increased knowledge of agriculture decreases the willingness to pay for organic and locally grown applesauce.

Keywords

applesaucechoice experimentconsumer demandfruit and vegetable marketslocal foodmultinomial logit modelorganicPennsylvaniawillingness to pay
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 38 , Issue 3 , December 2009 , pp. 357 - 370
Copyright
Copyright © 2009 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alfnes, F., Guttormsen, A.G., Steine, G., and Kolstad, K. 2006. “Consumers’ Willingness to Pay for the Color of Salmon: A Choice Experiment with Real Economic Incentives.” American Journal of Agricultural Economics 88(4): 1050–1061.Google Scholar
Batsell, R.R., and Lodish, L.M. 1981. “A Model and Measurement Methodology for Predicting Individual Consumer Choices.” Journal of Marketing Research 18(1): 1–12.Google Scholar
Brooker, J.R., and Eastwood, D.B. 1989. “Using State Logos to Increase Purchases of Selected Food Products.” Journal of Food Distribution Research 20(1): 175–183.Google Scholar
Brown, D.J., and Schrader, L.F. 1990. “Cholesterol Information and Shell Egg Consumption.” American Journal of Agricultural Economics 72(3): 548–555.Google Scholar
Cloud, J. March 2, 2007. “Eating Better than Organic.” Time Magazine.Google Scholar
Darby, K., Batte, M.T., Ernst, S., and Roe, B. 2008. “Decomposing Local: A Conjoint Analysis of Locally Produced Foods.” American Journal of Agricultural Economics 90(2): 476–86Google Scholar
Dimitri, C., and Greene, C. 2002. Recent Growth Patterns in the U.S. Organic Foods Market. Agriculture Information Bulletin Number 777. U.S. Department of Agriculture, Economic Research Service, Market and Trade Economics Division and Resource Economics Division. Washington, D.C.Google Scholar
Giraud, K.L., Bond, C.A., and Bond, J.J. 2005. “Consumer Preferences for Locally Made Specialty Food Products Across Northern New England.” Agricultural and Resource Economics Review 34(2): 204–216.Google Scholar
Govindasamy, B. Schilling, Sullivan, K., Turvey, C., Brown, L., and Puduri, V. 2004. “Returns to the Jersey Fresh Promotional Program: The Impacts of Promotional Expenditures on Farm Cash Receipts in New Jersey.” Food Policy Institute Publication Number RR-0404-006. Rutgers: The State University of New Jersey.Google Scholar
French, S.M., Story, M., Hannan, P., Breitlow, K.K., Jeffrey, R.W., Baxter, J.S., and Snyder, M.P. 1999. “Cognitive and Demographic Correlates of Low-fat Vending Snack Choices Among Adolescents and Adults.” Journal of the American Dietetic Association 99(4): 471–474.Google Scholar
Hartman Group. 2008. Pulse Report: Consumer Understanding of Buying Local. Bellevue, WA.Google Scholar
Ippolito, P.M., and Mathios, A.D. 1990. “Information, Advertising and Health Choices: A Study of the Cereal Market.” RAND Journal of Economics 21(3): 459–480.Google Scholar
Kallas, Z., Gómez-Limón, J.A., and Arriaza, M. 2007. “Are Citizens Willing to Pay for Agricultural Multifunctionality?” Agricultural Economics 36(3): 405–419.Google Scholar
Kiesel, K., and Villas-Boas, S.B. 2008. “Another Nutritional Label—Experimenting with Grocery Store Shelf Labels and Consumer Choice.” CUD ARE Working Paper No. 1060. Department of Agricultural and Resource Economics, University of California, Berkeley.Google Scholar
Kinnucan, H.W., Xiao, H., Hsia, C., and Jackson, J.D. 1997. “Effects of Health Information and Generic Advertising on U.S. Meat Demand.” American Journal of Agricultural Economics 79(1): 13–23.Google Scholar
Klonsky, K., and Richter, K. 2007. Statistical Review of California's Organic Agriculture: 2000 to 2005. University of California Agricultural Issues Center. Davis, CA.Google Scholar
Lancaster, K. 1966. “A New Approach to Consumer Theory.” Journal of Political Economy 74(2): 132–157.Google Scholar
Loureiro, M.L., McCluskey, J.J., and Mittelhammer, R.C. 2001. “Assessing Consumer Preferences for Organic, Eco-Labeled, and Regular Apples.” Journal of Agricultural and Resource Economics 26(2): 404–416.Google Scholar
Loureiro, M.L., and Hine, S. 2002. “Discovering Niche Markets: A Comparison of Consumer Willingness to Pay for Local (Colorado Grown), Organic, and GMO-Free Products.” Journal of Agricultural and Applied Economics 34(3): 477–487.Google Scholar
Loureiro, M.L., and Umberger, W.J. 2007. “A Choice Experiment Model for Beef: What U.S. Consumer Responses Tell Us About Relative Preferences for Food Safety, Country-of-Origin Labeling and Traceability.” Food Policy 32(4): 496–514.Google Scholar
Louviere, J.J., Hensher, D.A., and Swait, J.D. 2000. Stated Choice Methods: Analysis and Application. Cambridge, UK: Cambridge University Press.Google Scholar
Louviere, J.J., and Woodworth, G.C. 1983. “Design and Analysis of Simulated Consumer Choice or Allocation Experiments: An Approach Based on Aggregate Data.” Journal of Marketing Research 20(4): 350–367.Google Scholar
Lusk, J.L., and Schroeder, T.C. 2004. “Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks.” American Journal of Agricultural Economics 86(2): 467–482.Google Scholar
Mathios, A.D. 1998. “The Importance of Nutrition Labeling and Health Claim Regulation on Product Choice: An Analysis of the Cooking Oils Market.” Agricultural and Resource Economics Review 25(2): 159–168.Google Scholar
McEachern, M.G., and Willock, J. 2004. “Producers and Consumers of Organic Meat.” British Food Journal 106(7): 534–552.Google Scholar
Mtimet, N., and Albisu, L.M. 2006. “Spanish Wine Consumer Behavior: A Choice Experiment Approach.” Agribusiness 22(3): 343–362.Google Scholar
Nayga, R.M. 2002. “Looking for the Nutritional Label: Does It Make a Difference?” Choices 17(4): 39–42.Google Scholar
Patterson, P.M. 2006. “State-Grown Promotion Programs: Fresher, Better?” Choices 21(1): 41–46.Google Scholar
Perez, A., Lin, B., and Allshouse, J. 2001. Demographic Profile of Apple Consumption in the United States. Fruit and Tree Nuts Situation and Outlook Number FTS-292. U.S. Department of Agriculture, Economic Research Service. Washington, D.C. Google Scholar
Pretty, J.N., Ball, A.S., Lang, T., and Morison, J.I.L. 2005. “Farm Costs and Food Miles: An Assessment of the Full Cost of the UK Weekly Food Basket.” Food Policy 30(1): 1–19.Google Scholar
Rossman, W.J. 2007. The Influence of Consumer Knowledge and Characteristics on Applesauce Selection: Evidence from a Survey of Pennsylvania Residents. M.S. Thesis, Department of Agricultural Economics and Rural Sociology, The Pennsylvania State University.Google Scholar
Thilmany, D., Bond, C.A., and Bond, J.K. 2008. “Going Local: Exploring Consumer Behavior and Motivations for Direct Food Purchases.” American Journal of Agricultural Economics 90(5): 1303–1309.Google Scholar
Umberger, W.J., Feuz, D.M., Calkins, C.R., and Killinger-Mann, K. 2002. “U.S. Consumer Preference and Willingnessto-Pay for Domestic Corn-Fed Beef Versus International Grass-Fed Beef Measured Through an Experimental Auction.” Agribusiness 18(4): 491–504.Google Scholar
USDA-AMS. 2007. Number of Operating Farmers Markets. Available at http://www.ams.usda.gov (accessed January 2009).Google Scholar
USDA-NASS. 2008. Agricultural Statistics. U.S. Department of Agriculture, National Agricultural Statistics Service. Available at http://www.nass.usda.gov/Publications/Ag_Statistics/2008/2008.pdf (accessed January 2009).Google Scholar