I scream, you scream, we all scream for local ice cream: Consumer preferences for locally processed foods

Abstract

AbstractThis study investigates consumer preferences for local brands of consumer packaged goods. Using a structural model of consumer demand for ice cream and data on retail ice cream sales from multiple locations of a large food retailer, we estimate consumer demand for local brands of ice cream and the willingness to pay for the local attribute. Using fixed and random coefficients logit models of product choice with cost shifters as instruments, we find that Ohio consumers are willing to pay, on average, an additional $0.13 per serving for local brands of ice cream. In counterfactual simulations, we estimate that replacing local brands of ice cream would reduce welfare by $2.78 million dollars annually for consumers in Ohio. For policymakers seeking to maintain and attract new local food producers, these results provide new insights into the potential gains that could result from increased local consumer packaged goods entrants [EconLit Citations: D12, D61, Q11, Q18].