Masters Theses

Date of Award

8-2021

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural and Resource Economics

Major Professor

Xuqi Chen

Committee Members

Seong-Hoon Cho, Karen L. DeLong, Kimberly L. Jensen, T. Edward Yu

Abstract

As consumer's interest in labeled products increases, consumer preference for labeled products garnering more attention. Understanding the factors influencing consumer preference for labeled food products can aid effective food marketing, and ultimately benefit farmer profit. This study investigates how reference prices would affect consumer preference for familiar or unfamiliar labeled products. The reference price is used to provide price information for the product that consumers are interested in. The data is obtained from a 2019 online national survey via qualtrics. The contingent valuation method (CVM) and a seemingly unrelated regression (SUR) are used to investigate the effect of different formats of reference price (i.e., low means versus high means, small intervals versus large intervals) on consumer willingness-to-pay (WTP) for conventional and labeled chips and salad. The results show that a high mean of the reference price of conventional chips has a significant positive impact on WTP for all the chips products except for the transitional organic chips. In the case of salad, a higher mean of the reference price of conventional salad has a significant impact on consumer WTP for all the alternative salads, except for organic. However, the interval of reference prices does not have a significant impact on WTP on labeled food products in either case of chips or salad. The internal reference price (the price consumers paid last time) is a significant impact on consumer WTP. The results indicate that when consumers are faced with more considerable uncertainty in the shopping environment, they become more reliant on the price they paid last time.

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