Choosing Brands: Fresh Produce versus Other Products |
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| Authors: | Yanhong H Jin David Zilberman Amir Heiman |
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| Institution: | Yanhong H. Jin is assistant professor in the Department of Agricultural Economics at Texas A&M University. David Zilberman is professor in the Department of Agricultural and Resource Economics at University of California, Berkeley, and a member of the Giannini Foundation of Agricultural Economics. Amir Heiman is senior lecturer in the Department of Agricultural Economics and Management at Hebrew University, Israel. |
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| Abstract: | Assuming that brands contribute to quality risk reduction, prestige, and design, we derive and test hypothesis on the willingness to pay (WTP) for brands across different product categories (electronics, clothing, packaged food, and fresh produce). Using the random effect tobit model on the stated point value of WTP and the ordered probit model on the stated range of WTP, we find that WTP for brands of fresh produce is least among the four product categories controlling for relevant demographic variations. Simulations show that fresh produce has a higher optimal price premium for brands but with a much smaller market share. |
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| Keywords: | brands fresh produce hedonic pricing maximum entropy ordered probit tobit willingness to pay |
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