Willingness to pay for fresh milk and associated marketing services

Abstract

The study assesses willingness to pay for fresh milk and associated services among some potential consumers (students on the University of Ghana Campus) in Accra, Ghana. Students were sampled using multi-stage stratified random sampling procedure. In the first stage, one hall was selected from two categories of halls - rent paying and non-rent paying halls. In the second stage, respondents were sampled randomly from each of the two halls. The double bounded contingent valuation method was used to analyse willingness to pay. The results show that while price does not significantly influence willingness to pay, one's perception of fresh milk consumption as a health risk, and income status significantly influence willingness to pay. The estimated marginal effects also reveal that a unit increase in the perception of fresh milk consumption as a health risk precipitates a 14 per cent decrease in willingness to pay for fresh milk brought to the local market, and 11 per cent increase in the willingness to pay for milk delivered to the doorstep. Consumers in the more endowed income group have a 32 per cent more willingness to pay for fresh milk brought to the local market or delivered at the doorstep. The results provide empirical basis for market strategy formation in the peri-urban milk marketing.