Are Consumers Willing to Pay Price Premiums for Newly Developed East Coast Broccoli Varieties?

Plant breeders in the “Developing an Eastern Broccoli Industry” project are developing new varieties adapted to growing conditions in the east. For economic viability, it is equally important to examine whether the new varieties are accepted by east coast consumers. In particular, east coast growers may benefit from the increased interest in locally- and regionally-produced foods in recent years. Therefore, we address the following question: Are east coast consumers willing to pay price premiums for these new varieties, which are produced locally/regionally? To shed light on this issue, we conducted a series of broccoli tasting experiments in Ithaca and Geneva (NY) in August, 2013. In these experiments, we manipulated broccoli attributes to assess how consumer willingness to pay is influenced by physical (e.g., crown appearance) and credence (e.g. origin) product attributes. In our experiments, over 140 subjects revealed their willingness to pay for one pound of broccoli crowns of three varieties (a west coast variety and two newly developed east coast varieties), where we manipulate information about the origin. We analyzed the experimental data using an econometric model based on random utility theory. We find that consumers are willing to pay a price premium between $0.22 and $0.30 for the local product, although the west-coast variety scores higher in appearance. Overall, the two new varieties have the potential to become a commercial success in the east coast.