Is this Food “Local?” Evidence from a Framed Field Experiment
Department of Applied Economics and Statistics, University of Delaware, Newark, DE.
In the marketplace, consumers often see foods labeled as “local.” But laws regarding what foods can be labeled as local vary, and how consumers perceive the definition of such labels has received little attention. To study this question, we designed a framed field experiment that took advantage of the small distances in the Mid-Atlantic region of the United States and oyster harvesting locations. In this novel study, consumers were presented with purchase decisions for a food that could be accurately characterized by multiple definitions of the term local, some definitions based on mileage and others on political boundaries. We analyze responses from 374 adult consumers to estimate willingness to pay (WTP) for oysters labeled as local using these various definitions. We find that consumers are responsive to the label definitions. Consumers are less willing to pay for local oysters defined as harvested within 400 miles (the USDA definition of a local food) than for local oysters harvested within 100 miles and 25 miles. Consumers’ WTP increases when local is defined as being harvested in a region associated with the same state of the purchase decision than when harvested in an adjacent state. Interestingly, the highest WTP is when no specific definition of local is provided to consumers.
Local foods, Label definition, Framed field experiments