Quantifying demand and willingness to pay for local food production

Abstract

Abstract The location of production and processing has had an increasingly prominent role in discussions regarding food systems today. Acknowledging the increasing importance, we study consumer preferences for and perception of local products with a particular focus on how willingness to pay (WTP) for local origin indication differs across products, types of designations, and rurality of the individual's geographic location. Using data collected through an online survey, we focused on Indiana residents’ preferences for sweet corn and Barbecue (BBQ) sauce with the sample representing both rural and urban consumers across all twelve economic growth regions in the state. Results reveal significant premiums for local products, with variations in WTP for certain local indications across rural and urban respondents. We also find that the marketing channel (farmer's market, direct from producer, or retail/grocery store) significantly influences respondents’ WTP for the two products, with results varying across the two products.