Organic or local? investigating consumer preference for fresh produce using a choice experiment with real economic incentives

Abstract

Determining consumers' preferences and willingness to pay (WTP) for organically grown and locally grown fresh produce is very important for stakeholders because it helps them figure out what type of fresh produce to grow and sell, what to emphasize in marketing efforts, and what are reasonable prices to charge. However, the literature that studies and compares consumers' preference and WTP for both organically and locally grown fresh produce is sparse. The objective of this study was to investigate consumers' WTP for organically grown and locally grown fresh produce and the marketing segmentation of these two types of produce. We combined a hypothetical experiment and nonhypothetical choice mechanism to investigate consumers' WTP for the attributes organic, local, and organic plus local for fresh produce. We found that when real products were used in the hypothetical experiment, the hypothetical bias (the difference between what people say they will pay and what they would actually pay) was not high. We found that consumers' WTP for the organic attribute was about the same as their WTP for the local attribute. Consumers' sociodemographics affected their choice between organically grown and locally grown produce. Furthermore, we found that consumers patronized different retail venues to purchase fresh produce with different attributes. The findings of the research have great importance for fresh produce stakeholders to make correct production and marketing decisions; the findings also contribute to experimental method choice in consumers' WTP research.