CONSUMER WILLINGNESS TO PAY FOR LOCAL VEGETABLES GROWN IN A CONTROLLED ENVIRONMENT: THE CASE OF LETTUCE
Nishi, Irin Ferdous
A willingness to pay study for lettuce has been conducted to determine potential price advantages for year-round local vegetables grown in Controlled Environment Agriculture (CEA) production systems. The specific objective of the study was to measure differences in consumer willingness to pay for lettuce with different origins (New York State vs. Out-of-State) and grown under different production systems (CEA vs. field-grown). In addition, the study examines whether further information about origin and production system affects consumer willingness to pay. In a lab setting (Cornell Lab for Experimental Economics and Decision Research), we manipulated information about the different production systems and origins of lettuce and then we tested for consumers' WTP for loose leaf lettuce. The Becker-DeGroot-Marschak (BDM) auction was used to elicit consumer WTP. Results suggest that consumers are willing to pay a price premium of $0.30 for local lettuce and they are indifferent between the production systems. Also, results suggest that information about the production system/origin does not affect consumer WTP. The results support the hypothesis that locally-grown vegetables have the potential to become a commercial success in the New York State. Lettuce producers and channel members can use the estimated price premium as a reference when making their production, pricing, or promotion decisions.
Experimental auction; Food and Agriculture; Hydroponic Lettuce; Willingness to Pay; Agriculture economics; BDM auction; Controlled Environment Agriculture (CEA)
Gomez, Miguel I.
Mattson, Neil S.
Applied Economics & Management
MS of Applied Economics & Management
Master of Science
dissertation or thesis