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Point-of-Sale Specific Willingness to Pay for Quality-Differentiated Beef

Kar Ho Lim (), Michael Vassalos () and Michael Reed ()
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Kar Ho Lim: Department of Agricultural and Environmental Sciences, Tennessee State University, Nashville, TN 37209, USA
Michael Vassalos: Department of Agricultural Sciences, Clemson University, Clemson, SC 29634, USA
Michael Reed: Department of Agricultural Economics, University of Kentucky, Lexington, KY 40506, USA

Sustainability, 2018, vol. 10, issue 7, 1-13

Abstract: Despite the growing interest of producers and consumers toward grass-fed, local, and organic beef, the supply chain for these products to reach consumers is not always clear-cut. Among the available options are direct-to-consumers and the conventional food supply chain. Although consumers may pay a premium for beef differentiated by quality attributes, the willingness to pay (WTP) difference across point-of-sales is unclear. In this study, we contrast the WTPs for conventional, grass-fed, local, and organic beef by brick-and-mortar supermarkets (B&Ms), farmers’ markets, and via online stores. We conduct a choice experiment with a nationwide online sample of American consumers. The findings indicate that compared to B&Ms, more consumers are reluctant to purchase beef from farmers’ markets and online outlets. Moreover, the WTP for quality-differentiated attributes varies significantly by the point-of-sales. For most consumers, the downside of online or farmers’ markets outweighs the upside of the quality-differentiated attributes sold in those venues.

Keywords: farmers’ market; online grocery; local; organic; grass-fed; beefsteak; willingness to pay (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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