Using a Randomized Choice Experiment to Test Willingness to Pay for Multiple Differentiated Products

The purpose of this paper is to evaluate the importance of different attributes of three major product categories: fruits, vegetables and ornamental plants, in order to understand the relative effect of these attributes on consumer’s choice. Using an online survey we implemented a choice based conjoint experiment. Respondents were asked to randomly evaluate two of the ten products being tested in the survey. A mixed logit model was used to analyze the data and determine willingness to pay for each product attribute. We further tested for the impact of purchase behavior and any randomization effect. Results for most of the products we analyzed demonstrate that consumers value locally grown products more than national products. Furthermore, results show that consumers tend to pay more money for farm and organic produce, but less for the latter one if consumers do not have prior experience buying organic. We also find a randomization effect that should be accounted for when evaluating multiple products in a survey.