Consumers preferences on nutritional attributes of dairy-alternative beverages: hedonic pricing models

Abstract

Dairy products, especially milk play a crucial role in assuring dietary quality for U.S. households. However, due to taste, nutrition, health and environmental concerns, households increasingly prefer to consume dairy alternative beverages instead of conventional milk in the U.S. This work is motivated by the need to take into consideration of intrinsic characteristics and differences of such characteristics when analyzing the changes of consumers' purchasing behavior of and willingness to pay for dairy alternative beverages and conventional milk products. After aggregating and organizing the purchase data of Nielsen Homescan and first-hand nutrition data, this study estimates both linear and semi-log hedonic pricing models. The results show that consumers exert the highest weights and assign highest evaluation on such qualitative characteristic as nutritional attributes which include calories, protein, fat, vitamin A and vitamin D in which protein is the most valued attribute and other characteristics such as package size, multi pack and brand. The hedonic pricing order and value of these qualitative characteristic are indicative of consumers' purchasing behavior and thus provide essential information for manufacturers to better differentiated their products and develop products catering to consumer's preferred attributes.