Consumer Willingness-to-Pay for Sweet Grown Alabama Sweet Potatoes
Type of DegreeMaster's Thesis
Agricultural Economics and Rural Sociology
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In this study, we capture consumer willingness to pay for differently labeled and sourced sweet potatoes at Alabama farmers markets using an incentive-based experiment. Data were collected at farmers markets in four metropolitan areas across Alabama during the fall of 2022. The experiment utilized the Becker-DeGroot-Marschak (BDM) mechanism for consumer valuation. We find that on average, respondents are willing to pay $6.77 for a basket of sweet potatoes from a farm in Alabama that participates in the Sweet Grown Alabama program, $5.72 for a basket of sweet potatoes from an Alabama farm, $4.78 for a basket of sweet potatoes from a farm in Mississippi, and $4.16 for a basket of sweet potatoes from a farm in the US that is not in Alabama. This suggests that, on average, farmers market consumers are willing to pay $1.56 more for a basket of Alabama sweet potatoes relative to a basket of sweet potatoes from a farm in the US but not from Alabama. Furthermore, farmers market consumers are willing to pay an additional $1.05 for sweet potatoes with a Sweet Grown Alabama label compared to sweet potatoes grown in Alabama. Interestingly, we found that overall familiarity with the Sweet Grown Alabama program was low among participants, but this did not affect the premium of the brand, as familiarity with Sweet Grown Alabama did not have a statistically significant effect on its price premium. The price premium for a basket of sweet potatoes with the Sweet Grown Alabama logo over a basket that is from Alabama but does not carry the logo, and the price premium for a basket of sweet potatoes from Alabama over a basket from the US outside of Alabama were investigated. Having a higher household income and higher education level both positively impacted the price premia for Sweet Grown Alabama and Alabama sourced sweet potatoes. Our results provide insight to consumer preferences for local food and quantify a premium for Alabama’s state labeling program, Sweet Grown Alabama. This study is expected to positively impact future research for state marketing programs as well as Sweet Grown Alabama’s future marketing promotions. Farmers interested in learning about consumer trends for locally labeled food would also benefit from these findings.