Academic journal article Agricultural and Resource Economics Review

The Relative Importance of Search versus Credence Product Attributes: Organic and Locally Grown

Academic journal article Agricultural and Resource Economics Review

The Relative Importance of Search versus Credence Product Attributes: Organic and Locally Grown

Article excerpt

Organic foods and local foods have come to the forefront of consumer issues, due to concerns about nutrition, health, sustainability, and food safety. A conjoint analysis experiment quantified the relative importance of, and trade-offs between, apple search and experience attributes (quality/blemishes, size, flavor), credence attributes (conventional vs. organic production method, local origin vs. product of USA vs. imported), and purchase price when buying apples. Quality is the most important apple attribute. Production method-organic versus conventional-had no significant impact on preferences.

Key Words: conjoint analysis, organic, locally grown, credence attributes

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Two significant trends have been developing in the area of fresh fruit and vegetables. Organic foods and local foods have come to the forefront of consumer issues in the past 5 years. These trends have been influenced by issues related to nutrition, health, sustainability, and food safety. As consumers have become increasingly concerned with the quality, safety, and production features of food, the demand for food products with credence attributes (e.g., origin, organic, locally grown, environment-friendly) on product labels has been garnering increased attention (Dentoni et al. 2009). Studies suggest that credence attributes impact consumer buying intentions. Certain segments of the population are willing to pay more for food products carrying a label identifying specific credence features, including safety and quality characteristics, certified as being present by a trusted source (Mabiso et al. 2005).

No area has been more affected by these trends than fresh fruits and vegetables. Although organic foods have received a lot of corporate attention because of fast growth rates, the growth has been from a very low base and the absolute amount is still quite low. In 2008, according to a Nielsen Report, organic sales of fresh produce were only 6 percent of the total fresh produce sales, and only about one percent of total supermarket sales were organic. Additionally, the current economic crisis has made the price differential more of a barrier to purchase.

In contrast to organic, buying local has become more in vogue. Whether fact or myth, consumers have seen buying local fresh products as assurance of food safety and as insurance against foodborne illness, and because of the lack of transit, locally grown produce is perceived to be fresher and tastier. Supermarkets are identifying the farmers and producers in advertising, in in-store promotional material, and on their website. Some stores are listing how far their food travels to the store.

The objective of this study is to determine the relative strength of two credence attributes, organic and locally produced, within the context of other fresh apple search and experience attributes. Specifically, the study addresses which credence attribute has the higher impact on consumers' preference for the product.

A conjoint analysis experiment quantified the relative importance of, and trade-offs between, apple physical search and experience attributes (sweetness,1 quality/blemishes,2 size, crispness), credence attributes (conventional vs. organic production method, local origin vs. product of USA vs. imported), and purchase price on purchase intention when buying apples.

Background on Credence Attributes

Consumers demand high quality, safety, and freshness in their fruits and vegetables. Quality is a multidimensional attribute, with certain quality dimensions (color, odor, taste) readily discernible by consumers (Anderson and Anderson 1991). These readily discernible dimensions are known as search and experience attributes. "Search" attributes refer to visual attributes of products (such as size, color, and blemishes) for which consumers can seek pre-purchase information, while "experience" attributes (such as taste) are ones that are ascertained on the basis of consuming the product (Nelson 1970, 1974, Stigler 1961). …

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