Consumers will pay more for local foods: Study
As public interest in locally produced food increases, so does consumers’ willingness to pay a little extra for products that have not been transported vast distances, say researchers writing in Ecological Economics.
The new study investigated how the distances food is transported affect consumer preferences and willingness to pay (WTP) for foods – finding that while preferences vary depending on the type of food, there is a definite demand and willingness to pay more for food items that are sourced locally.
“Our study shows that consumers are willing to pay more for foods with less food miles (or local foods),” said the research team, led by Professor Rodolfo Nayga from the University of Arkansas, USA.
“Moreover, labelling local foods by means of food miles labels (distance of transportation) might be an effective marketing strategy as the mere labelling of distance of transportation increases WTP,” they said.
Nayga and his team also noted that while environmental attitudes did not affect WTP, a perception that fresh local food has superior attributes compared to food that travelled more miles, coupled with a belief in supporting regional economy when buying local food increase consumer WTP for less travelled products.
The research team investigated how consumers' willingness to pay (WTP) for food varies with the distance the food travelled in 47 German consumers.
“Our study design differs from previous research in that we do not use the term ‘local food’ or the generic term ‘food miles’ in the product description with consumers when measuring WTP,” explained the team.
“On the contrary, we elicit consumer WTP for food that has travelled specific distances (“distance of transportation”) using non-hypothetical experimental auctions involving real food and real money.”
Results from the mock auctions and a follow-up questionnaire revealed that consumers prefer local foods and foods labelled with food miles. These are reflected in consumers’ perceptions of freshness, taste and food safety, all of which have an impact on an increased WTP for local foods, said the researchers.
“Miles labelling per se increases WTP for foods compared to products not labelled with food miles,” said the authors.
Source: Ecological Economics
Volume 88, April 2013, Pages 67–75, doi: 10.1016/j.ecolecon.2013.01.006
“Effect of distance of transportation on willingness to pay for food”
Authors: Carola Grebitus, Jayson L. Lusk, Rodolfo M. Nayga Jr.