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An experimental approach to valuing new differentiated products

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  • Maynard, Leigh J.
  • Hartell, Jason G.
  • Meyer, A. Lee
  • Hao, Jianqiang

Abstract

An experimental store was created to evaluate initial demand for locally-produced and guaranteed tender steak products as a more realistic alternative to contingent valuation (CV) and dichotomous-choice experimental methods. Strengths of the approach are incentive compatibility, a realistic consumption set, and a familiar choice environment. Consumers selected among USDA Choice, premium quality, lean, guaranteed tender, and locally-produced strip steaks. A double-hurdle count data model indicated initial willingness-to-pay for locally-produced steak comparable to prior CV results, but demand was highly elastic. Demand for premium quality steak crowded out demand for the guaranteed tender product, contrasting with prior dichotomous-choice experimental results.
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  • Maynard, Leigh J. & Hartell, Jason G. & Meyer, A. Lee & Hao, Jianqiang, 2004. "An experimental approach to valuing new differentiated products," Agricultural Economics, Blackwell, vol. 31(2-3), pages 317-325, December.
    • Handle: RePEc:eee:agecon:v:31:y:2004:i:2-3:p:317-325
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    9. Painter, Kathleen, 2008. "An Analysis of Food-Chain Demand for Differentiated Farm Commodities: Implications for the Farm Sector," Research Reports 280103, United States Department of Agriculture, Rural Development.
    10. Maynard, Leigh J. & Wang, Xin, 2009. "Context-Dependent BSE Impacts on Canadian Food-at-Home Beef Purchases," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 48431, Agricultural and Applied Economics Association.
    11. Yan, Jiong & Barkmann, Jan & Marggraf, Rainer, 2007. "Chinese tourist preferences for nature based destinations: a choice experiment analysis," DARE Discussion Papers 0706, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    12. Maynard, Leigh J. & Burdine, Kenneth H. & Meyer, A. Lee, 2003. "Market Potential for Locally Produced Meat Products," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(2), pages 1-12, July.
    13. Neill, Clinton L. & Lahne, Jacob, 2022. "Matching reality: A basket and expenditure based choice experiment with sensory preferences," Journal of choice modelling, Elsevier, vol. 44(C).
    14. Elliott J. Dennis & Glynn T. Tonsor & Jayson L. Lusk, 2021. "Choosing quantities impacts individuals choice, rationality, and willingness to pay estimates," Agricultural Economics, International Association of Agricultural Economists, vol. 52(6), pages 945-962, November.
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    17. Elizabeth S. Byrd & Nicole J. Olynk Widmar & Benjamin M. Gramig, 2018. "Presentation matters: Number of attributes presented impacts estimated preferences," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 377-389, March.
    18. Leigh J. Maynard & Ellen Goddard & John Conley, 2008. "Impact of BSE on Beef Purchases in Alberta and Ontario Quick‐Serve Restaurants," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(3), pages 337-351, September.
    19. Trenkel, Hermann E., 2005. "Möglichkeiten experimenteller Methoden in der Agrarökonomie," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 40, March.

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