Abstract
AbstractState marketing programs for food and agricultural products are largely driven by consumers’ desires to purchase in-state products. Evaluations of state marketing programs have largely ignored consumer location and proximity to surrounding states, measures of ethnocentrism, and the presence of other geographic marketing labels. This study examines willingness to pay for own and out-of-state labels for a generic commodity, milk, within an eight-state region. The results show that an aggregate model conceals consumer heterogeneity in marginal willingness to pay values for state brands as compared to a disaggregate model, even when using random parameter logit models.
Highlights
The use of food labels as marketing tools to distinguish products has become increasingly prevalent in recent years (McCluskey and Loureiro, 2003)
The marketing techniques employed by these state programs, some of which began in the 1980s, focus on promoting and improving the relationships between resident consumers and local food businesses within state borders
The pooled model is used to determine the effect of state pride scores and each consumer’s distance from neighboring state borders on preferences for state branded products on a regional scale
Summary
The use of food labels as marketing tools to distinguish products has become increasingly prevalent in recent years (McCluskey and Loureiro, 2003). The main goal of state branding programs, which have been established in every state (Onken and Bernard, 2010), is to use these improved relationships as a means to increase in-state producer income (Carpio and Isengildina-Massa, 2016) While these programs have the potential to benefit local food systems, they generally do not effectively measure their impacts or the cost-effectiveness of public funds used in these efforts (Hand and Clancy, 2014). The tradeoffs between state and regional branding are difficult to parse out without having a better understanding of one’s state pride and how each individual views the effect of distance on food sourcing The exclusion of both out-of-state consumers and neighboring states’ branded products from state market program evaluations raises an interesting question: how does a consumer’s proximity to state borders and the level of state pride affect his/her willingness to pay (WTP) for in-state, neighboring state, regional and even national brands?
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