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Household Preferences for Organic, Locally Grown and Fair Trade Attributes of Food and Beverage Products: Survey Evidence from the Southeastern USA

Liliana Helo, Pallab Mozumder, William F. Vasquez

Abstract



We investigate households’ preferences and willingness to pay (WTP) for environmentally benign and sustainably-produced food and beverage products. We consider three different types of attributes in these products: (1) organic, (2) locally-produced and (3) fair trade. Using the contingent valuation method, we provide estimates of households’ willingness to pay (WTP) for these three attributes in a large urban center in Southeastern US. Seemingly unrelated Tobit regression models are used to evaluate the role of different covariates in explaining the variations of households’ willingness to pay for these three different attributes of food and beverage products. The empirical results reveal that consumers are willing to pay a substantial premium for these product’s attributes and that such willingness to pay is associated to environmental consciousness and knowledge. We hope that results from this study can offer useful insights to consumers, producers and decision-makers in shaping future policy design to expand the market share of environmentally benign and sustainably-produced food and beverage products.

Keywords


Contingent Valuation, Willingness To Pay, Organic, Locally Grown, Fair Trade, Food and Beverage Products.

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