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.
Original language | English |
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Pages (from-to) | 463-475 |
Number of pages | 13 |
Journal | American Journal of Agricultural Economics |
Volume | 90 |
Issue number | 2 |
DOIs | |
State | Published - May 2008 |
Keywords
- Brands
- Fresh produce
- Hedonic pricing
- Maximumen tropy
- Ordered probit
- Tobit
- Willingness to pay