A new food label to aid farmland preservation programs: Evidence from a field experiment

Abstract

An original preserved-farm (PF) label was invented to examine consumers’ interest in farmland preservation and willingness to pay (WTP) a premium for products from such farms. Using field experiments with watermelons, the new label was also compared with a local (LL) label which may capture some of the same sources of consumer utility. In total, 328 consumers participated across field experiment sessions in three states (Delaware, Maryland, and Pennsylvania) in two types of locations (farmer’s markets, public parks). Tests showed significant premiums for both LL and PF labels. Importantly though, the PF label premium surpassed that for the LL label at all locations except Maryland and held its value across states better than the LL label. Latent class analysis was used to further examine the data, dividing consumers into four clusters. Tobit models run on these clusters identified distinct marketing opportunities for users of the PF label. Overall, evidence showed a PF label may be able to aid in increasing preserved farmland while increasing farmer income.