What comes first, origin or production method? An investigation into the relative importance of different attributes in the demand for eggs

B Lopez-Galan,J Barreiro-Hurle,A Gracia

doi:10.5424/sjar/2013112-3953

Abstract

This paper analyses consumer preferences for different eggs attributes to assess the importance placed by consumers on the origin and method of production when shopping. The data comes from an experiment conducted in Spain during 2009. An Error Component Random Parameter Logit model is used to estimate the effect of different eggs characteristics on consumers’ utility and derive their willingness to pay. Results suggest that consumers positively value the free-range and organic method of production and the local and regional origin and that they are willing to pay an additional € 0.85 for each package of six free-range or organic eggs, € 0.77 for locally produced and € 0.27 for regional produced eggs. Hence, the least valued eggs for consumers are those produced in cages and outside the region. Relative to this product, the highest willingness to pay corresponds to free-range or organic eggs followed by locally produced eggs and finally, by the regional eggs. Thus, we can conclude that Spanish consumers give more importance when shopping for eggs to the method of production than to the origin of production.

Highlights

Consumer food demand is driven by food product prices and consumer income as stated by traditional economic theory but increasingly by four classess of quality attributes for food products being those of sensory, health, process and convenience
Different consumer segments can be found in the food market with a different interpretation and preference for the four quality attributes (Grunert, 2006)
We focus on consumer preferences regarding the method and origin of production to better understand consumer demand in order to understand added value and differentiate food products that meet those consumers’ demands

Summary

Introduction

Consumer food demand is driven by food product prices and consumer income as stated by traditional economic theory but increasingly by four classess of quality attributes for food products being those of sensory, health, process and convenience. One of the quality attributes for which consumers are increasingly showing an interest are process attributes, the way and where a food product has been produced (Pouta et al, 2010) The reason behind this growing interest is related to the series of food scares in Europe, bovine spongiform encephalopathy (BSE) being the most prominent (Grunert, 2006). These have increased consumer interest in food production in specific aspects such as the method of production and the origin (geographic) of production. We focus on consumer preferences regarding the method and origin of production to better understand consumer demand in order to understand added value and differentiate food products that meet those consumers’ demands

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Conclusion