Are consumers no longer willing to pay more for local foods? A field experiment

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Agricultural and Resource Economics Review
Government programs promoting locally produced foods have risen dramatically. But are these programs actually convincing consumers to pay more for locally produced food? Studies to date, which have mostly relied on hypothetical stated preference surveys, suggest that consumers will pay premiums for various local foods and that the premiums vary with the product and presence of any geographic identity. This study reports results from a large field experiment involving 1,050 adult consumers to reveal consumers’ willingness to pay (WTP) premiums for “locally produced” foods – mushrooms and oysters. Despite strong statistical power, this study reveals no positive effect of the locally produced label on consumer WTP. These null results are contrary to most of the existing literature on this topic. The finding that consumers are not willing to pay more for local foods has important implications for state and federal agencies that promote labeling campaigns that seek to increase demand and generate premiums for locally produced foods.
This article was originally published in Agricultural and Resource Economics Review. The version of record is available at: © The Author(s), 2023. Published by Cambridge University Press on behalf of the Northeastern Agricultural and Resource Economics Association
field experiment, local foods, willingness to pay, Q18, Q13, D12, C93
Davidson, Kelly A., Badri Khanal, and Kent D. Messer. “Are Consumers No Longer Willing to Pay More for Local Foods? A Field Experiment.” Agricultural and Resource Economics Review, 2023, 1–21. doi:10.1017/age.2023.27.