Consumers' demand for higher quality olive oil in a Spanish region (Aragón)

In the European food market the most important attributes for consumers are taste and health followed by the process and convenience attributes. In addition, the consumers’ concern for the health impacts of diet has an increasing importance on consumer food choice, and health can now be considered as important as taste. One product whose consumption increased tremendously, mainly in countries where their consumption was inexistent is olive oil. Olive oil is one of the main components of the Mediterranean diet, considered worldwide as one of the healthiest food diets. The main objective of this study is to analyze consumers’ demand for higher quality olive oil in a producing country (Spain) and more specifically in one of its regions (Aragón). The highest quality olive oil corresponds to the extra virgin olive oil (EVOO). To achieve the main goal, the following four specific objectives were undertaken: i) to establish the most important quality attributes for EVOO; ii) to determine the most important characteristics affecting the decision to purchase EVOO; iii) to assess consumers’ preferences for the most important attributes of EVOO; and iv) to measure the effect of the most relevant consumers characteristics on preferences for extra virgin olive oil. The above mentioned objectives were achieved through four different tasks: i) observation and gathering of information on EVOO in different supermarkets; ii) literature review; iii) pilot online survey and; iv) real experiments. The real experiments were used to assess consumers’ preferences and to estimate willingness-to-pay (WTP) by using a real choice experiment and a real choice experiment after tasting the EVOOs. In particular, three EVOO attributes were evaluated, “price”, “geographical origin of production” and “Protected Designation of Origin (PDO)”. Using data from the choice experiments, an Error Component Random Parameter Logit (ECRPL) model with correlated errors was estimated and the effect of the attributes on consumers’ utility and their WTPs were calculated. Results from this study corroborated previous findings in Spain indicated that the most important attributes for EVOO are the taste, price, geographical origin of production and the PDO certification. In particular, in the area of study (Aragón), consumers were willing to pay an extra premium of 2€ for an EVOO that carried out the PDO label followed by 1.5€ for an EVOO from the Bajo Aragon and 0.79€ from an EVOO from the rest of Aragón. However, when consumers could taste the product before choosing, results were different. Instead of being the PDO the most value characteristic, respondents highly value the EVOO from the Bajo Aragon, willing to pay an extra premium of 2.92€, followed by the origin of Aragón (1.42€) and lastly, the PDO certification (0.96€). Taste was the most important characteristic that strongly influenced the purchase and mainly the repurchase of an EVOO. When consumers tasted the EVOO before the purchase they were less sensitive to the price. In addition, to further investigate consumers’ preference heterogeneity, a cluster analysis using WTPs for the choice experiment with tasting was undertaken. Results indicated that older consumers seek for PDO quality signals when purchasing an EVOO while younger consumers valued more the origin of Bajo Aragon