Abstract
This study applies a Censored Normal Tobit Model on the 2016 survey data from 1,205 online shoppers in the South region of the United States to explain their Willingness To Pay (WTP) for a bundle of fresh produce from different origins. This study indicates that online shoppers are willing to pay $6.91, $6.38, and $5.22 for four pounds of bundled fresh produce that are locally, domestically grown, and imported respectively. We found that income category, interests in online shopping, interest level for local, interest level for organic, and monthly spending on fresh produce have a significant positive impact on the WTP for locally grown fresh produce. Results indicate that being married, high income, interests in online shopping, interests in local produce, interests in organic, and the monthly spending on fresh produce increase the WTP for domestically grown fresh produce, while age and being a female diminishes it. We further found that age, being a female, and interest in the freshness of the produce decrease the WTP for imported produce. Based on the findings from this study, we have suggested a couple of marketing implications and suggestions.
Highlights
Online shopping is increasingly growing as more consumers trust the online marketplace
We found that a grand majority of these online shoppers are willing to be aware of market outlets that are available in their communities for fresh produce
Factors that are significant in influencing the Willingness To Pay (WTP) for domestically grown fresh produce are: age, gender, marital status, category of income, interest in online shopping, interest level for local, interest level for organic, and the monthly spending on fresh produce
Summary
Online shopping is increasingly growing as more consumers trust the online marketplace. Products of various sort are currently available in this type of marketplace. Grocery stores like Walmart and Kroger have recently started offering an option for customers to order food products online with pickup service. Amazon, (2018) has an online store for fresh produce. There are a variety of labels that are used to identify fresh produce as local, domestic, or foreign/imported. The question for this study is how much consumers in the online marketplace are willing to pay more for fresh produce on the basis of their origin
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