Analysis of Consumer Preferences and Willingness to Pay for Misshapen Horticultural Commodities

Abstract

This research is conducted in considering that large number of misshapen horticultural commodities that are not considered by consumers due to the shape and/or other characteristics inherent in horticultural products in vegetable and fruit commodities, such as suboptimal physical conditions, different sizes, and unattractive colors that affect consumer preferences in buying them, although the nutritional content is not different from physically perfect products. The purpose of this study are to 1) analyze consumer preferences for suboptimal agricultural products, 2) analyze consumer willingness to pay (WTP) for suboptimal products. Further, conditional logit analysis is used to analyze consumer preferences using maximum likelihood estimation (MLE) approach, while Marginal Willingness to Pay or MWTP method is used to analyze consumer willingness. The result, the consumer preference on papaya commodities was based on optimal performance, no message framing, available in traditional markets and the amount of purchase exceeded one kilogram. Tha for cucumber, consumers preferred to buy it by considering optimal performance, without message framing, and available in traditional markets. The WTP value on papaya and cucumber indicates that the average WTP value for suboptimal products was lower than the optimal products. The WTP value for the optimal papaya was higher than the suboptimal papaya. For cucumber, the WTP value for the optimal cucumber was higher than the suboptimal product. We suggest producers should set the price cheaper for suboptimal products to compete in the market and reduce the amount of waste.