Preferences and Willingness to Pay for Local and Imported Citrus

Abstract

Indonesia horticultural product has experienced major implication from global free trade. Quantity of imported fruits was increased rapidly during the last ten years under implication of free trade. In spite implies market positively by boosting consumption and market growth, imports also implies increasing competition between imported and local fruit. Increase of imports has significantly affect production by decreasing number of certain scale of farm whose growth local product. It is important measuring whether the market and costumer response due the competition between locally grown and imported fruits.  The study intended to (1) examined the difference of demands between local citrus and imported one. (2) measured demographic factors that influence costumer choice to buy local or imported citrus,  and (3) examined product attributes that influence consumer willingness to pay (WTP) for local and imported citrus. The study was conducted in Malang district, East Java, Indonesia.  Respondents were determined by purposive quota sampling method. WTP data was collected refer to modified “Vickrey Auction” principles. Binary Logit Regression and Ordinary Least Square analysis have been employed respectively to measure demographic factor that influenced costumer decision and examine the product attributes related to costumer WTP.   The study has revealed that there were a different demand curve pattern and different own price elasticity between locally grown and imported citrus.  Higher Income, higher number of dependant and younger costumer has driven higher probability on consuming imported citrus. This research also shown that color, safety, healthy and packaging significantly affect costumer willingness to pay for imported citrus, while taste and safety was significant for local citrus. The findings indicated that in certain market, consumer would pay higher price to afford imported citrus, which placed locally grown citrus in the high competition. Higher incomes will increase imported citrus consumption. Meanwhile, color and packaging are factors that must be considered by citrus local grower to win the competition. Keywords: import; demand; locally grown; competition; willingness to pay; citrus.