Assessing the Market Potential for Local Food Product: Evidence from a Non-Hypothetical Economic Experiment

F Akaichi, Gil Jose Maria, Rodolfo Nayga

Research output: Contribution to journalArticleResearchpeer-review

14 Citations (Scopus)

Abstract

Purpose – The purpose of this paper is to analyze the market potential of a locally produced and high quality food product (i.e. white bean “Mongeta Ganxet” (MG)) from Catalonia, Spain. Consumers’ willingness to pay (WTP) for the product is elicited using a non-hypothetical economic experiment and then the sensitivity of WTP values is analyzed with regard to additional information provided to participants that includes reference prices, leaflets and tasting. Finally, a sample-selection model is estimated to assess the factors that significantly affect consumers’ WTP for the product. Design/methodology/approach – To elicit the willingness to pay a premium for the local food product, 90 subjects were invited to participate in a random nth price experimental auction. Before auctioning the product, participants were asked to complete a questionnaire about consumer attitudes and purchase habits. Findings – Only 7 percent of participants are willing to pay a price higher than the minimum price from which the MG product may be purchased directly from a producer or the local producing market. Also, it was found that providing reference prices of substitute products (both conventional and alternative high quality white beans) positively affects WTP for the MG. Interestingly, however, provision of information on organoleptic, nutritional and cooking characteristics of the MG and product tasting do not significantly influence WTP. Finally, the level of consumption, the degree of knowledge about the product and the participants’ previous experience increase the purchasing intention for the MG.
Original languageEnglish
Pages (from-to)19-39
Number of pages20
JournalBritish Food Journal
Volume114
Issue number1
Publication statusPrint publication - 2012
Externally publishedYes

Fingerprint

Market potential
Food products
Economic experiments
Local food
Willingness-to-pay
Bean
Reference price
Purchasing
Substitute
Catalonia
Local markets
Questionnaire
Purchase
Sample selection model
Design methodology
Habit
Consumer attitudes
Experimental auctions
Spain
Premium

Keywords

  • Willingness to pay
  • Local food
  • Experimental auctions

Cite this

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title = "Assessing the Market Potential for Local Food Product: Evidence from a Non-Hypothetical Economic Experiment",
abstract = "Purpose – The purpose of this paper is to analyze the market potential of a locally produced and high quality food product (i.e. white bean “Mongeta Ganxet” (MG)) from Catalonia, Spain. Consumers’ willingness to pay (WTP) for the product is elicited using a non-hypothetical economic experiment and then the sensitivity of WTP values is analyzed with regard to additional information provided to participants that includes reference prices, leaflets and tasting. Finally, a sample-selection model is estimated to assess the factors that significantly affect consumers’ WTP for the product. Design/methodology/approach – To elicit the willingness to pay a premium for the local food product, 90 subjects were invited to participate in a random nth price experimental auction. Before auctioning the product, participants were asked to complete a questionnaire about consumer attitudes and purchase habits. Findings – Only 7 percent of participants are willing to pay a price higher than the minimum price from which the MG product may be purchased directly from a producer or the local producing market. Also, it was found that providing reference prices of substitute products (both conventional and alternative high quality white beans) positively affects WTP for the MG. Interestingly, however, provision of information on organoleptic, nutritional and cooking characteristics of the MG and product tasting do not significantly influence WTP. Finally, the level of consumption, the degree of knowledge about the product and the participants’ previous experience increase the purchasing intention for the MG.",
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Assessing the Market Potential for Local Food Product: Evidence from a Non-Hypothetical Economic Experiment. / Akaichi, F; Maria, Gil Jose; Nayga, Rodolfo.

In: British Food Journal, Vol. 114, No. 1, 2012, p. 19-39.

Research output: Contribution to journalArticleResearchpeer-review

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AU - Maria, Gil Jose

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AB - Purpose – The purpose of this paper is to analyze the market potential of a locally produced and high quality food product (i.e. white bean “Mongeta Ganxet” (MG)) from Catalonia, Spain. Consumers’ willingness to pay (WTP) for the product is elicited using a non-hypothetical economic experiment and then the sensitivity of WTP values is analyzed with regard to additional information provided to participants that includes reference prices, leaflets and tasting. Finally, a sample-selection model is estimated to assess the factors that significantly affect consumers’ WTP for the product. Design/methodology/approach – To elicit the willingness to pay a premium for the local food product, 90 subjects were invited to participate in a random nth price experimental auction. Before auctioning the product, participants were asked to complete a questionnaire about consumer attitudes and purchase habits. Findings – Only 7 percent of participants are willing to pay a price higher than the minimum price from which the MG product may be purchased directly from a producer or the local producing market. Also, it was found that providing reference prices of substitute products (both conventional and alternative high quality white beans) positively affects WTP for the MG. Interestingly, however, provision of information on organoleptic, nutritional and cooking characteristics of the MG and product tasting do not significantly influence WTP. Finally, the level of consumption, the degree of knowledge about the product and the participants’ previous experience increase the purchasing intention for the MG.

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