Consumers’ willingness to pay for local foods across different urban-rural landscapes

Consumers’ willingness to pay for local foods across different urban-rural landscapes

Author: Chiu-Lin Huang

Task 5 Team completed an experiment this August to assess consumers’ willingness to pay (WTP) for local foods across different urban-rural landscapes. To validate the results obtained from scanner data, the team designed a lab-in-the-field experiment. This experiment investigated how different interpretations of “local”—whether produced locally or predominantly sold locally—affect purchasing decisions among supermarket shoppers in urban and rural Pennsylvania. The experiment was conducted at two supermarkets owned by the Giant Company: a Giant supermarket in Huntingdon, PA, and a Martin’s supermarket in Altoona, PA. It aimed to elicit consumers’ actual WTP for local and non-local potato chips. On average, consumers in rural area (Huntingdon) are willing to pay 10 percent more for local potato chips. In urban area (Altoona), however, while consumers are willing to pay slightly more for local potato chips than for non-local ones, this difference is not statistically significant. This finding aligns with earlier project results, which indicated that consumers in more rural or agricultural areas tend to have higher WTP values for local food. Importantly, the alternative definitions of “local”—one defined by the area of production and the other by the predominant area of sales—did not significantly impact WTP for local chips. While urban consumers in Altoona demonstrated a higher WTP for non-local potato chips, and rural consumers in Huntingdon showed a willingness to pay a premium for local chips, there was no significant difference in local premiums between urban and rural areas under either definition of “local.”