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Consumer WTP for Blueberry Attributes: A Hierarchical Bayesian Approach in the WTP Space

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  • Shi, Lijia
  • House, Lisa
  • Gao, Zhifeng

Abstract

A stated preference experiment is conducted to elicit consumer WTPs for various blueberry attributes. The mixed logit model is employed to account for consumer heterogeneity. The model is set up in the WTP space where the distributions of WTPs are directly specified. Considering the high diversity of consumer perception and the remarkable benefits from differential marketing, we apply the hierarchical Bayesian approach and the discussion is based on the individual level WTP estimates. The results show that “local produced” attribute is preferred over simply “produced in the U.S.” by most respondents. By contrast, less than 50% of the respondents are willing to pay premium for organic blueberries. In addition, hardly any relationship between demographics and WTPs is detected. Demographic information seems to have little explanation power for consumer perception in small purchases like fruits or vegetables. In this light, the hierarchical Bayesian approach is critical to the practice of differential marketing strategies.

Suggested Citation

  • Shi, Lijia & House, Lisa & Gao, Zhifeng, 2011. "Consumer WTP for Blueberry Attributes: A Hierarchical Bayesian Approach in the WTP Space," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103524, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:103524
    DOI: 10.22004/ag.econ.103524
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    References listed on IDEAS

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    1. Johansson-Stenman Olof & Svedsäter Henrik, 2008. "Measuring Hypothetical Bias in Choice Experiments: The Importance of Cognitive Consistency," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-10, September.
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    More about this item

    Keywords

    Agribusiness; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Marketing;
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