A Case Study Of Price Premiums For Local Foods

Abstract

This study uses econometric techniques to assess price premiums for local foods, including five fresh products and four semi-processed/processed products. In our model, the natural logarithm of retail price is a function of product attributes (local, organic, and product type), retail outlet types, and seasons. In our model, a local food product is produced, processed and distributed within a 30-mile radius of Ithaca, New York. The model allows us to determine the value of the attribute local, control for other sources of price variability. Our results suggest that the attribute local enjoys price premiums for two out of five fresh products (strawberries and potatoes) and for three out of four semi-processed/processed foods (whole chickens, eggs, and two percent milk).