Source: UNIVERSITY OF FLORIDA submitted to
IMPROVING THE UNDERSTANDING OF CONSUMER STATED PREFERENCES FOR FOOD PRODUCT
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
TERMINATED
Funding Source
Reporting Frequency
Annual
Accession No.
0217174
Grant No.
(N/A)
Project No.
FLA-FRE-004855
Proposal No.
(N/A)
Multistate No.
(N/A)
Program Code
(N/A)
Project Start Date
Jan 10, 2009
Project End Date
Sep 30, 2013
Grant Year
(N/A)
Project Director
Gao, ZH.
Recipient Organization
UNIVERSITY OF FLORIDA
G022 MCCARTY HALL
GAINESVILLE,FL 32611
Performing Department
Food and Resource Economics
Non Technical Summary
With the declining proportion of food expenditure relative to household income, more knowledge about the health benefit of food, increasing awareness of food-borne disease and more concerns about the environment, consumers are increasingly demanding foods that are assured to be healthier, safer, more palatable, and more environment or animal friendly. An accurate estimate of consumer preference and accurate prediction of consumer purchase behavior based on quality attributes is the premise to know what and how to satisfy consumers? demand for food quality. Wrong estimates of consumer preferences will lead to faulty or inefficient government policy and failed market strategy, which may result in economic loss to society, the food industry, production agriculture, and taxpayers. However, accurately estimating consumer preferences is difficult. This task is hindered by the complicated relationships among food quality attributes and the lack of standard research methods to truly reveal consumer preferences for product quality. This project will investigate the interactions between different types of food product attributes and explore the divergence in consumer preferences gained from different methods. The results will provide needed information to policy makers and industry who are interested in consumer preferences as well as benefit researches using those methods to study consumer preferences.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
(N/A)
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6030910301010%
6030920301020%
6031120301010%
6031122301010%
6041120301010%
6070910301010%
6070920301010%
6071120301010%
6090920301010%
Goals / Objectives
The overall goal of this project is to gain deep insight of consumer preference for food product quality and explore the impacts of different methods on consumer preference estimates. Specific objectives of this projects are: 1. Using various methods such as choice experiments, experimental auctions and contingent valuation to estimate consumer preferences for food quality attributes. 2. Change the methodology variables in those methods to determine the effects of those variables on the estimates of consumer preferences. 3. Verify the estimated preference by observation of consumer behavior in real world purchases. Compare elicited preferences using different methods with the true revealed preferences.
Project Methods
Orange juice is used as an example to describe the methods used in the project. The same method can also be applied to other products. 1) Collecting the attribute quality information available on orange juice in the current market and classified them based on different types of attributes. 2) Select one type of attribute (e.g. search attributes) to investigate consumer preferences. 3) Control the information content, payment methods (hypothetical vs. non-hypothetical); choose one approach from each of CV, CE and EA to estimate consumer evaluation of attributes (if possible, multiple approaches from each of CV, CE and EA may be selected). 4) Add another type of orange juice attribute (e.g. experience or credence) in the study, and estimate consumer preferences using the methods in step 3. 5) After a certain amount of time, the same research in step 2 and step 3 can be conducted to the same sample to estimate their preferences. 6) Estimates of consumer preferences before or after new types of information, and at different time periods can be compared to investigate the relationships between different types of attributes and the effect of time. 6) Household survey data may be used as a baseline to evaluate the estimates of consumer stated preference using CV, CE and EA.

Progress 10/01/12 to 09/30/13

Outputs
Target Audience: Nothing Reported Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? The project provide opportunities to three graduate students in the field of marketing and consumer behavior. One PhD student was involved in the blueberry project and was graduated in 2012; one MS student was involved in the EU consumer preference of imported fresh fruit project, and was graduated in 2012; one MS was student involved in the Chinese consumer preference of orange juice products project and was graduated in 2013. Students has been trained to understand the important valuation methods that estimate consumer WTP, such as experimental auction, choice experiment and contingent valuation. They were also trained to solve and analyze problems using systematic approaches and apply theory to empirical problems. How have the results been disseminated to communities of interest? All the project results have been presented at professional conferences. The project results of the EU consumer preferences of fresh fruit, and Chinese consumer preferences of orange juice products have been included into the industrial reports to the Florida Department of Citrus, which are available to all stakeholders that are interested in the citrus industry, the EU fresh citrus fruit market and Chinese orange juice market. What do you plan to do during the next reporting period to accomplish the goals? This project will continue to work on issues that help improve the estimates of consumer preferences and WTP. In the meanwhile this project will work on the problems that are critical to agricultural industries of Florida and the United States, providing updated and useful marketing information for policy makers and industries to make sound decisions.

Impacts
What was accomplished under these goals? Accurately identifying consumer preferences helps develop more efficient markets and policies that can improve social welfare. This information also provide useful information for agribusiness in both domestic and international market. The project collect data on US consumer preferences of organic and local blueberry, EU consumer attitudes toward fresh fruit from different countries and Chinese consumer preferences of different types of orange juice products. The data on blueberry help determine one of the important factors that affect the WTP estimates. Controlling this factor may significantly improve empirical WPT estimates. The study on EU consumer preferences of fresh fruit from different countries help agribusiness develop the appropriate market strategies regarding product origin labeling as well as optimal import combination of fresh fruit from different countries. The data on Chinese consumer preferences of orange juice products determine the cross price effect in contingent valuation (CV), which helps improve CV method that has broad applications in many areas. Improved WTP estimates methods can provide more useful information to policy makers and stakeholder to make sound decisions.

Publications

  • Type: Journal Articles Status: Accepted Year Published: 2014 Citation: Gao, Z. S. Wongg, L. House and T. Spreen. EU Consumers Preferences of Fresh Fruit from Different Countries: Perception, Attitude and Willingness to Pay. British Food Journal, Accepted.
  • Type: Journal Articles Status: Submitted Year Published: 2015 Citation: Shi, L., Z. Gao, Chen, X and 2013. Cross-price Effect on Willingness-to-Pay Estimates in Open-ended Contingent Evaluation. Food Policy, revise and resubmission
  • Type: Journal Articles Status: Published Year Published: 2013 Citation: 3. Shi, L.g, L. House and Z. Gao. 2013. Impact of Purchase Intentions on Full and Partial Bids in BDM Auctions: Willingness-to-pay for Organic and Local Blueberries. Journal of Agricultural Economics 64: 707-718


Progress 01/10/09 to 09/30/13

Outputs
Target Audience: Nothing Reported Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Two MS student and two PhD students have been involved in most of the project. Students are trained with skills to design survey questionnaires, statistical and econometric analysis, writing report and research paper. Students have also been trained to present research results at professional meetings and submit manuscripts to journal. Students are the coauthors of two published journal articles. How have the results been disseminated to communities of interest? The research on Chinese consumer preferences for orange juice is part of the report of the outlook of Chinese citrus industry, which is available to stakeholders in citrus industry. The PI also presents the situation of Chinese citrus industry at industrial meetings. The paper on farmers' market consumer has been report by several industrial magazines and university newsletters, which targets general publish outside academics. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? This objective is gradually achieved by studying 1?U.S. consumer choice of fresh citrus and fresh squeezed juice; 2) EU consumer preferences for fresh citrus produced in different countries; 3) Chinese consumer preference for different types of orange juice; 4) Malawi consumer attitudes towards organic coffee; 5) Effect of country of origin on consumer preferences for organic products; 6) Consumer preference for fresh blueberries in different types of shopping outlet; 7?The impact of choice experimental design on consumer stated preferences; 8) The comparison of three most important valuation methods; 9) The impact of package redesign on consumer demand for orange juice; and 10?Farmers' market consumer attitudes toward the farmers' market and their response to dishonest vendor practices. In most of those studies, multiple methods are used, and information provided to respondents in studies vary. The variation in the methodology helps improve our understanding of consumer stated preference and investigate impacts of methodology variable on estimates of consumer preference for food products. Studies on consumer preference of fresh citrus show that freshness, flavor and appearance are the most important fresh citrus attributes for both EU and US consumers. However, heterogeneous preferences exist among consumers and both demographic and behavioral variables have significant impacts on preferences. It appears that there is a potential to develop specific marketing strategies for fresh citrus based on demographics. Studies on consumer preference of orange juice demonstrate that when participants observe the process of squeezing fresh oranges to make juice, they are statistically more willing to pay a higher price for not only the fresh squeezed orange juice, but also other types of orange juices. Compared with choice experiments, the van Westendorp method failed to pick up significant differences in willingness to pay for fresh juices. In addition, Chinese consumers are more willing to pay for 100% not from concentrate juice (NFC) than 100% from concentrate juice (FCJ) and juice drink products (JD) with less than 100% juice contents. However, their willingness to pay for 100% juices is significantly lower than current market price. If the market prices of 100% juice decreased, their market share, especially the market share of NFC will increase significantly. Studies on consumer preference of organic food demonstrate that organic coffee may receive a significantly higher premium in low-income African countries such as Malawi. However, only a small fraction of consumers would like to pay for the price premium. Therefore, if domestic market for organic coffee was developed, growers need to develop high-end products targeting the niche market. In addition, consumer preference of organic fresh produce is significantly affected by the presence of country of origin label. Organic produce such as fresh broccoli from developed countries such as the United States and Canada receive much higher price than the organic produce from developing countries such as China and Mexico. In addition, proving more information about the US organic certification rule may reduce consumer bias toward organic produce from some developing countries. The studies on consumer preference of fresh blueberries show that consumers’ willingness to pay for different types of fresh blueberries varies by the types of shopping store. Consumers at the farmers market are more willing to pay for locally produced blueberries, while consumers at high-end grocery store are more likely to pay for organic blueberries. This indicates that growers need to choose their market channel carefully based on the characteristics of their products. The studies on the impact of valuation methods, the experimental design and packages design demonstrate that consumers’ valuation or choice of products can be easily changes by methodology factors and a simple package change, although no real changes are made for the products. These studies implies that stated consumer preferences should be carefully evaluated and validated before any solid conclusion can be drawn and any willingness to pay estimates can be used in marketing strategies and policy analysis. More in depth studies regarding the impact of methods on consumer stated preference should be conducted in the future. The research on farmers market indicate that FM shopping atmosphere, environmental consciousness, product freshness, and local production are the main reasons for consumers shopping at FMs. However, the majority of consumers had limited knowledge of individual FM vendors. Most consumers would continue to shop at FMs even after purchasing products that does not meet their expectations.

Publications

  • Type: Journal Articles Status: Published Year Published: 2009 Citation: Gao, Z. and T. Schroeder. 2009. Effect of Additional Quality Attributes On Consumer Willingness-to-Pay for Food Labels. American Journal of Agricultural Economics 91:795-809.
  • Type: Journal Articles Status: Published Year Published: 2009 Citation: Gao, Z. and T. Schroeder. 2009. Consumer Responses to New Food Quality Information: Are Some People More Sensitive than Others. Agricultural Economics 40: 339-346.
  • Type: Journal Articles Status: Published Year Published: 2010 Citation: Gao, Z., T C. Schroeder and X. Yu. 2010. Consumer Willingness-to-Pay for Cue Attribute: the Value beyond its Own. Journal of International Food and Agricultural Marketing 22: 1-17.
  • Type: Journal Articles Status: Published Year Published: 2010 Citation: Gao, Z., L. O. House and X. Yu. 2010. Using Choice Experiments to Estimate Consumer Valuation: the Role of Experimental Design and Attribute Information Loads. Agricultural Economics 41:555-565.
  • Type: Journal Articles Status: Published Year Published: 2010 Citation: Lee, J.-Y., Z. Gao and M. G. Brown. 2010. A Study of the Impact of Package Changes on Orange Juice Demand. Journal of Retailing and Consumer Services 17:487-491.
  • Type: Journal Articles Status: Published Year Published: 2011 Citation: Gao, Z., L. A. House, F. G. Gmitter Jr., M. F. Valim, A. Plotto and E. A. Baldwin. 2011. "Consumer Preferences for Fresh Citrus: Impacts of Demographic and Behavioral Characteristics." International Food and Agribusiness Management Review 14: 23-40.
  • Type: Journal Articles Status: Published Year Published: 2011 Citation: House, L. O., Z. Gao, T. H. Spreen, F. G. Gmitter Jr., M. F. Valim, A. Plotto, and E. A. Baldwin. 2011. Consumer Preference for Mandarins: Implications of a Sensory Analysis. Agribusiness: An International Journal 27:450-464.
  • Type: Journal Articles Status: Published Year Published: 2012 Citation: Kim, Hp., L. House, and Z. Gao. 2012. Theoretical and Perceptual Market Values for Fresh Squeezed Orange Juice. International Journal of Marketing Studies 4: 45-55.
  • Type: Journal Articles Status: Published Year Published: 2012 Citation: Gao, Z., M. Swisher, and X. Zhao. 2012. A New Look at Farmers Market: Consumer Knowledge and Loyalty. HortScience 47, 1102-1107.


Progress 10/01/11 to 09/30/12

Outputs
OUTPUTS: The objective of this project is to improve our understanding of the consumer stated preference for food products. This objective is gradually achieved by studying 1)Farmers' market consumer attitudes toward the farmers' market and their response to dishonest vendor practices. 2) Chinese consumer preference for different types of orange juice and 3) The comparison of three most important valuation methods regarding their efficiency. In the first study, surveys were used to determine the farmers' market consumer perception of characteristics of produce sold at farmers' markets and their reactions if they realized that the products they purchased are different from that are promised by vendors. In the second study, choice experiments and contingent valuation are used to estimate consumer preference for orange juice attributes such as juice amount, country of origin and GMO. And in the third study, contingent valuation methods, choice experiments and auction are used to elicit consumer willingness to pay for the same product to determine the factor that affects the differences. All the studies are team works including multidisciplinary collaboration among different departments. All the studies have resulted in presentations and publications. The second, and third studies are a part of student's desertion and thesis. PARTICIPANTS: The following graduate students were involved in 2nd-3th studies: Lijia Shi, Jing Xie, Xuqi Chen and Sing Wong. Sing Wong and Lijia have graduated in the summer of 2012. PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Accurately identifying consumer demand helps develop more efficient markets and policies that improve social welfare. The study of farmers' market consumer helps future farmers' market development by determining the most important factors affecting consumer shopping at the farmers' market. The study on Chinese consumer preference for orange juice help juice industries in the U.S. to gain market opportunities by providing the products that are most likely accepted by Chinese consumers. The third study help develop new methods or approaches to estimate consumer willingness to pay by determining the most important factors that may affect the estimates from different methods.

Publications

  • Kim, H., L. House, and Z. Gao. 2012. Theoretical and Perceptual Market Values for Fresh Squeezed Orange Juice. International Journal of Marketing Studies 4, 45-55.
  • Gao, Z., M. Swisher, and X. Zhao. 2012. A New Look at Farmers Market: Consumer Knowledge and Loyalty. HortScience 47, 1102-1107.


Progress 10/01/10 to 09/30/11

Outputs
OUTPUTS: The objective of this project is to improve our understanding of consumer stated preference for food product. This objective is gradually achieved by studying 1)Consumer preference for fresh citrus attributes; 2) Effect of country of origin on consumer preferences for organic products.3) EU consumer preferences for fresh citrus produced in different countries. 4) Consumer preference for fresh blueberries in different types of shopping outlet. Multiple methods are used in different studies to enhance our understanding of consumer preferences for food products. In the first study, surveys were used to determine the most important attributes of fresh citrus attributes to consumers and the different consumer groups that prefer different types of fresh citrus fruits. In the second study, choice experiments were used to estimate consumer preference for food attributes such as organic, local and country of origin. In the third study, contingent valuation methods were used to determine consumer willingness to pay from fresh citrus fruits (orange, mandarin, pummelo, and grapefruit) from different countries. And in the last study, experimental auctions were used to determine consumer WTP for local and organic produced fresh blueberries in different types of stores. The variation in the methodology helps improve our understanding of consumer stated preference and investigate the impacts of methodology variable on estimates of consumer preference for food products. All the studies are team works including multidisciplinary collaboration among different department. The first and the second studies have resulted in both presentations and publication. The third and the fourth studies were submitted to annual professional meeting. The second, third and the fourth study are a part of student's desertion and thesis. PARTICIPANTS: The following graduate students were involved in 2nd-4th studies: Lijia Shi, Jing Xie, Sing Wong PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Consumers are increasingly demanding foods that are assured to be healthier, safer, more palatable, and more environment or animal friendly. Accurately identifying consumer demand helps develop more efficient markets and policies that improve social welfare. Determining consumer preference of different fresh citrus and blueberry attributes helps farmers make more appropriate decision in the selection of production practices and in marketing their products. In addition, estimating the impact of country or origin on consumer preferences for organic food helps both organic industry and policy makers to develop more appropriate strategies to support the growth of organic agriculture in the U.S. and provide more products that are demanded by consumers.

Publications

  • House, L., Z. Gao, F. Gmitter, A. Plotto, F. Valim, and E. Baldwin. 2011. Influence of Sensory Attributes on Consumer Choice of Tangerines. Agribusiness: An International Journal 27:450-464
  • Gao, Z., L. House, J. Lee, F. Gmitter, A. Plotto, F. Valim, and E. Baldwin. 2011. Consumer Preferences for Fresh Citrus: Impacts of Demographic and Behavioral Characteristics. International Food and Agribusiness Management Review 14:23-40.


Progress 10/01/09 to 09/30/10

Outputs
OUTPUTS: The objective of this project is to improve our understanding of consumer stated preference for food product. This objective is gradually achieved by studying 1)The impact of choice experimental design on consumer stated preferences; 2) The impact of package redesign on consumer demand for orange juice; 3) Consumer preferences for blueberry attributes; and 4) Effect of country of origin on consumer preferences for organic products. Multiple methods are used in different studies to enhance our understanding of consumer preferences for food products. In the first study, different experimental designs were compared to determine the efficiency of those designs in estimation consumer willingness to pay. In the second study, demand model was estimated to study the impact of the Tropicana's package redesign on consumer demand for juices of various brands. In the third and fourth studies, choice experiments were used to estimate consumer preference for food attributes such as organic, local and country of origin. The variation in the methodology helps improve our understanding of consumer stated preference and investigate the impacts of methodology variable on estimates of consumer preference for food products. All the studies are team works including multidisciplinary collaboration among different department. The first and the second studies have resulted in both presentations and publication. And the third and the fourth studies are ready for submission to annual professional meeting. The study of consumer attitudes towards blueberry is a part of student's desertion, which is in the process of data collection and analysis. PARTICIPANTS: The following graduate students were involved in third and fourth studies: Lijia Shi, Jing Xie, Rocio Garrido-Gomez (exchanged student from Spain) PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Consumers are increasingly demanding foods that are assured to be healthier, safer, more palatable, and more environment or animal friendly. Accurately identifying consumer demand helps develop more efficient markets and policies that improve social welfare. The information on the efficiency of different choice experimental designs in estimating consumer WTP helps researchers to select more efficient methods to provide more accurate information to policy makers and industries on consumer preferences of food products. The study on the package redesign on orange juice demand demonstrates that business decision should based on solid market research to identify consumer responses to any product change, which provides valuable information to companies that may consider any change in their product. Determining consumer preference of different blueberry attributes helps farmers make more appropriate decision in the selection of production practices and in marketing their products. In addition, estimating the impact of country or origin on consumer preferences for organic food helps both organic industry and policy makers to develop more appropriate strategies to support the growth of organic agriculture in the U.S. and provide more products that are demanded by consumers.

Publications

  • Gao,Z., L. O. House and X. Yu. 2010. Using Choice Experiments to Estimate Consumer Valuation: the Role of Experimental Design and Attribute Information Loads. Agricultural Economics 41:555-565.
  • Lee, J.-Y., Z. Gao and M. G. Brown. 2010. A Study of the Impact of Package Changes on Orange Juice Demand. Journal of Retailing and Consumer Services 17:487-491.


Progress 10/01/08 to 09/30/09

Outputs
OUTPUTS: The objective of this project is to improve our understanding of consumer stated preference for food product. This objective is gradually achieved by studying 1)U.S. consumer choice of fresh citrus; 2) U.S. consumer preference for fresh squeezed juice; 3) Malawi consumer attitudes towards organic coffee. In each of those studies, multiple methods are used, and information provide to respondents in study is varied. In the first study, data on consumer importance rating of fresh citrus and rating of sensory attributes are collected; in the second study Van Westendorp's Price Sensitivity Meter and choice-base conjoint analysis are used; in the third study contingent valuation and choice-base conjoint analysis are employed. The variation in the methodology helps improve our understanding of consumer stated preference and investigate impacts of methodology variable on estimates of consumer preference for food products. The study of consumer choice of fresh citrus and preference for fresh juice is a team work that has results in several reports and presentations. The study of Malawi consumer attitudes towards organic coffee is a part of student's thesis which is in the process of data collection and analysis. PARTICIPANTS: The following graduate student was involved in the study of Malawi consumer preferences for organic coffee: Nkana,Fiskani. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Consumers are increasingly demanding foods that are assured to be healthier, safer, more palatable, and more environment or animal friendly. Accurately identifying consumer demand help develop more efficient markets and policies that improve social welfare. The information on consumer preference for fresh citrus, not only help citrus producers increase profitability by producing right product, but also assist citrus breeders to develop new products that are more preferred by consumers and more easily adopted by producers. The study on consumer preference for fresh squeezed juice help citrus industry decision making in seeking new outlets to increase sales of citrus and in developing appropriate price strategy to promote sale of fresh squeezed juice. The study on Malawi consumer attitudes towards organic coffee will provide critical information on the potential benefit of promoting organic coffee production in Malawi as an alternative cash crop to substitute tobacco. The multiple methods used in different studies assist industries, stakeholders and policy makers to more clearly understand the estimates of consumer preferences, therefore, to make more appropriate decisions.

Publications

  • Gao, Z., T C. Schroeder and X. Yu. 2010. Consumer Willingness-to-Pay for Cue Attribute: the Value beyond its Own. Journal of International Food and Agricultural Marketing 22: 1-17(in press.
  • Gao, Z. and T. Schroeder. 2009. Effect of Additional Quality Attributes On Consumer Willingness-to-Pay for Food Labels. American Journal of Agricultural Economics 91:795-809.
  • Gao, Z. and T. Schroeder. 2009. Consumer Responses to New Food Quality Information: Are Some People More Sensitive than Others. Agricultural Economics 40: 339-346.