Effect of distance of transportation on willingness to pay for food
2013
Grebitus, Carola | Lusk, Jayson L. | Nayga, Rodolfo M.
Consumers' interest in locally produced foods is increasing. Hence, there is a need to decipher and quantify consumers' desire for local foods and understand the underlying causes of this demand. More specifically, we examine in this paper the issue of distance of transportation and its' impact on consumer preferences. We investigate how consumers' willingness to pay (WTP) for food varies with the distance the food traveled. Results from non-hypothetical second-price auctions indicate that average WTP is falling in distance traveled, indicating a preference for local production. Results also indicate that the marginal value of a mile traveled depends on the type of food studied (apples vs. wine). Socio-demographic characteristics, perceptions of freshness, taste and food safety, as well as support of local economy impact WTP for local foods.
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