IDEAS home Printed from https://ideas.repec.org/p/ags/kucawp/31829.html
   My bibliography  Save this paper

Consumer Willingness To Pay For Domestic Milk

Author

Listed:
  • Vandermersch, Mieke
  • Mathijs, Erik

Abstract

Dairy farmers' profit margins are under pressure due to the downward trend of EU commodity prices for fluid milk and the increasingly powerful retail sector, in combination with increasing production costs. A likely solution to counter small margins is to add value to raw milk. This paper investigates the option of using a domestic origin-certification to upgrade the value of milk. Data stem from a consumer survey, conducted at the three largest supermarket chains in Flanders (Belgium). The results show evidence for a latent demand for domestic milk. Based on actually purchased brands in combination with top-of-mind attributes, two consumer types were distinguished (price-shoppers and added-value seekers), each with a different behaviour concerning domestic milk. Socio-demographic, attitudinal and behavioural variables were found to influence the probability that a consumer is willing to pay a premium for domestic origin-certified milk. But, the influence of these variables differed between both consumer types as well as when a different bid level was proposed.

Suggested Citation

  • Vandermersch, Mieke & Mathijs, Erik, 2004. "Consumer Willingness To Pay For Domestic Milk," Working Papers 31829, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    • Handle: RePEc:ags:kucawp:31829
    DOI: 10.22004/ag.econ.31829
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/31829/files/wp040091.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.31829?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jekanowski, Mark D. & Williams, Daniel R. & Schiek, William A., 2000. "Consumers’ Willingness to Purchase Locally Produced Agricultural Products: An Analysis of an Indiana Survey," Agricultural and Resource Economics Review, Cambridge University Press, vol. 29(1), pages 43-53, April.
    2. Maria Luz Loureiro & Jill J. McCluskey, 2000. "Assessing consumer response to protected geographical identification labeling," Agribusiness, John Wiley & Sons, Ltd., vol. 16(3), pages 309-320.
    3. Alessandro Bonanno & Rigoberto A. Lopez, 2004. "Private Labels, Retail Configuration, and Fluid Milk Prices," Food Marketing Policy Center Research Reports 082, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    4. John Loomis & Armando Gonzalez-Caban & Robin Gregory, 1994. "Do Reminders of Substitutes and Budget Constraints Influence Contingent Valuation Estimates?," Land Economics, University of Wisconsin Press, vol. 70(4), pages 499-506.
    5. Baker, Gregory A. & Crosbie, Peter J., 1993. "Measuring Food Safety Preferences: Identifying Consumer Segments," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(2), pages 1-11, December.
    6. Magnus Johannesson & Bengt Liljas & Per-Olov Johansson, 1998. "An experimental comparison of dichotomous choice contingent valuation questions and real purchase decisions," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 643-647.
    7. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    8. Christopher G. Leggett & Naomi S. Kleckner & Kevin J. Boyle & John W. Dufield & Robert Cameron Mitchell, 2003. "Social Desirability Bias in Contingent Valuation Surveys Administered Through In-Person Interviews," Land Economics, University of Wisconsin Press, vol. 79(4), pages 561-575.
    9. Kwamena K. Quagrainie & James Unterschultz & Michele Veeman, 1998. "Effects of Product Origin and Selected Demographics on Consumer Choice of Red Meats," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 46(2), pages 201-219, July.
    10. Frykblom, Peter, 1997. "Hypothetical Question Modes and Real Willingness to Pay," Journal of Environmental Economics and Management, Elsevier, vol. 34(3), pages 275-287, November.
    11. Loureiro, Maria L. & Umberger, Wendy J., 2002. "Estimating Consumer Willingness-To-Pay For Country Of-Origin-Labels For Beef Products," 2002 Annual meeting, July 28-31, Long Beach, CA 19745, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Verbeke, Wim & Ward, Ronald W., 2003. "Importance of EU Label Requirements: An Application of Ordered Probit Models to Belgium Beef Labels," 2003 Annual meeting, July 27-30, Montreal, Canada 22077, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Loureiro, Maria L. & Hine, Susan E., 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, Southern Agricultural Economics Association, vol. 34(3), pages 1-11, December.
    14. Jekanowski, Mark D. & Williams, Daniel R., II & Schiek, William A., 2000. "Consumers' Willingness To Purchase Locally Produced Agricultural Products: An Analysis Of An Indiana Survey," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(1), pages 1-11, April.
    15. Christopher D. Azevedo & Joseph A. Herriges & Catherine L. Kling, 2003. "Combining Revealed and Stated Preferences: Consistency Tests and Their Interpretations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 525-537.
    16. Loureiro, Maria L. & Umberger, Wendy J., 2004. "A Choice Experiment Model For Beef Attributes: What Consumer Preferences Tell Us," 2004 Annual meeting, August 1-4, Denver, CO 19931, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Govindasamy, Ramu & Italia, John & Adelaja, Adesoji, 2001. "Predicting Willingness-to-Pay a Premium for Integrated Pest Management Produce: A Logistic Approach," Agricultural and Resource Economics Review, Cambridge University Press, vol. 30(2), pages 151-159, October.
    18. Douglas Cooper, 2003. "Findings from the Competition Commission's Inquiry into Supermarkets," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 127-143, March.
    19. Brooker, John R. & Eastwood, David B. & Orr, Robert H., 1987. "Consumers' Perceptions Of Locally Grown Produce At Retail Outlets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 18(1), pages 1-9, February.
    20. Paul W. Dobson & Michael Waterson & Stephen W. Davies, 2003. "The Patterns and Implications of Increasing Concentration in European Food Retailing," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 111-125, March.
    21. Jayson L. Lusk & Darren Hudson, 2004. "Willingness-to-Pay Estimates and Their Relevance to Agribusiness Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(2), pages 152-169.
    22. repec:ccp:journl:v:54:y:2003:i:1:p:111-125 is not listed on IDEAS
    23. Frode Alfnes, 2004. "Stated preferences for imported and hormone-treated beef: application of a mixed logit model," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 31(1), pages 19-37, March.
    24. Huang, Ju-Chin & Haab, Timothy C. & Whitehead, John C., 1997. "Willingness to Pay for Quality Improvements: Should Revealed and Stated Preference Data Be Combined?," Journal of Environmental Economics and Management, Elsevier, vol. 34(3), pages 240-255, November.
    25. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-266, March.
    26. Ronald W. Cotterill & Tirtha Pratim Dhar, 2003. "Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel," Food Marketing Policy Center Research Reports 074, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    27. Levidow, L. & Bijman, J., 2002. "Farm inputs under pressure from the European food industry," Food Policy, Elsevier, vol. 27(1), pages 31-45, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Melanie Lefevre, 2011. "Willingness-to-pay for Local Milk-based Dairy Product in Senegal," CREPP Working Papers 1108, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
    2. Taglioni, Chiara & Cavicchi, Alessio & Torquati, Biancamaria & Scarpa, Riccardo, 2011. "Influence of Brand Equity on Milk Choice: A Choice Experiment Survey," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(3), pages 1-21, December.
    3. Lefèvre, Mélanie, 2014. "Do Consumers Pay More for What They Value More? The Case of Local Milk-based Dairy Products in Senegal," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), pages 1-20, April.
    4. Salamon, Petra & Weible, Daniela & Weber, Sascha & Christoph-Schulz, Inken, 2016. "Pros and Cons of Introducing a Mandatory Country of Origin Labelling for Dairy Products in Germany," 2016 International European Forum (151st EAAE Seminar), February 15-19, 2016, Innsbruck-Igls, Austria 244520, International European Forum on System Dynamics and Innovation in Food Networks.
    5. Nannan Kang & Erda Wang & Yang Yu, 2019. "Valuing forest park attributes by giving consideration to the tourist satisfaction," Tourism Economics, , vol. 25(5), pages 711-733, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Melanie Lefevre, 2011. "Willingness-to-pay for Local Milk-based Dairy Product in Senegal," CREPP Working Papers 1108, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
    2. Carlos E. Carpio & Olga Isengildina-Massa, 2009. "Consumer willingness to pay for locally grown products: the case of South Carolina," Agribusiness, John Wiley & Sons, Ltd., vol. 25(3), pages 412-426.
    3. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, March.
    4. 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.
    5. Darby, Kim & Batte, Marvin T. & Ernst, Stanley C. & Roe, Brian E., 2006. "Willingness to pay for locally produced foods: A customer intercept study of direct market and grocery store shoppers," 2006 Annual meeting, July 23-26, Long Beach, CA 21336, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Gregory Poe & Jeremy Clark & Daniel Rondeau & William Schulze, 2002. "Provision Point Mechanisms and Field Validity Tests of Contingent Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(1), pages 105-131, September.
    7. Thuriane Mahé, 2010. "Are Stated Preferences Confirmed by Purchasing Behaviours? The Case of Fair Trade-Certified Bananas in Switzerland," Journal of Business Ethics, Springer, vol. 92(2), pages 301-315, April.
    8. Schulz, Lee L. & Schroeder, Ted C. & White, Katharine L., 2012. "Value of Beef Steak Branding: Hedonic Analysis of Retail Scanner Data," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(2), pages 1-14, August.
    9. Daniel McFadden, 2009. "The human side of mechanism design: a tribute to Leo Hurwicz and Jean-Jacque Laffont," Review of Economic Design, Springer;Society for Economic Design, vol. 13(1), pages 77-100, April.
    10. Loureiro, Maria L. & Umberger, Wendy J., 2007. "A choice experiment model for beef: What US consumer responses tell us about relative preferences for food safety, country-of-origin labeling and traceability," Food Policy, Elsevier, vol. 32(4), pages 496-514, August.
    11. Loureiro, Maria L. & Hine, Susan, 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, Cambridge University Press, vol. 34(3), pages 477-487, December.
    12. Eva Camacho-Cuena & Aurora García-Gallego & Nikolaos Georgantzís & Gerardo Sabater-Grande, 2004. "An Experimental Validation of Hypothetical WTP for a Recyclable Product," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(3), pages 313-335, March.
    13. Siikamaki, Juha & Layton, David F., 2007. "Discrete choice survey experiments: A comparison using flexible methods," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 122-139, January.
    14. Loureiro, Maria L., 2003. "Rethinking new wines: implications of local and environmentally friendly labels," Food Policy, Elsevier, vol. 28(5-6), pages 547-560.
    15. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    16. Dobbs, Leah Moore & Jensen, Kimberly L. & Leffew, Megan Bruch & English, Burton C. & Lambert, Dayton M. & Clark, Christopher D., 2016. "Consumer Willingness to Pay for Tennessee Beef," Journal of Food Distribution Research, Food Distribution Research Society, vol. 47(2), pages 1-24, July.
    17. Patterson, Paul M. & Martinez, Samuel Cardona, 2004. "State and Origin Branding in Hispanic Food Markets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(3), pages 1-12, November.
    18. Nick Hanley & Felix Schlapfer, "undated". "Calibration of Stated Willingness to Pay for Public Goods with Voting and Tax Liability Data: Provision of Landscape Amenities in Switzerland," Working Papers 2002_2, Business School - Economics, University of Glasgow.
    19. Gubanova, Tatiana & Adamowicz, Wiktor L. & McMillan, Melville, 2009. "‘Pocket and Pot’: Hypothetical Bias in a No-Free-Riding Public Contribution Game," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49318, Agricultural and Applied Economics Association.
    20. Bandara, Ranjith & Tisdell, Clement A., 2003. "Willingness to pay for different degrees of Abundance of Elephants," Economics, Ecology and Environment Working Papers 48966, University of Queensland, School of Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:kucawp:31829. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/alkulbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.