Estimation of market equilibrium values for apple attributes

2018 ◽  
Vol 10 (1) ◽  
pp. 135-151 ◽  
Author(s):  
Jong Woo Choi ◽  
Chengyan Yue ◽  
James Luby ◽  
Shuoli Zhao ◽  
Karina Gallardo ◽  
...  
Keyword(s):  
Consumer Preferences ◽  
Supply And Demand ◽  
Mixed Logit ◽  
Market Equilibrium ◽  
Breeding Programs ◽  
Content Type ◽  
Mixed Logit Models ◽  
Equilibrium Prices ◽  
Demand Curves ◽  
Social Surplus

Purpose Development of new cultivars requires extensive genetic knowledge, trained personnel, and significant financial resources, so it is crucial for breeders to focus on the attributes most preferred by the key supply chain stakeholders such as consumers and producers. The purpose of this paper is to identify which attributes generate the highest total revenue or social surplus, information that breeders can take into account as they allocate resources to focus on attributes in their breeding programs. Design/methodology/approach This study used mail-in and online surveys to collect consumer and producer choice experiment data, and then employed mixed logit models to analyze and simulate individual producer and consumer willingness to pay (WTP) for the apple attributes. Findings Based on the simulation results, this study derived the supply and demand curves and the market equilibrium prices and quantities for each apple attribute. Based on the WTP analysis for both consumer and producer, this paper found the highest equilibrium price and welfare for apples come from crispness, followed by flavor. Originality/value The authors propose a framework to estimate the equilibrium prices and quantities of a product based on the results of choice experiments. The framework can be easily adapted to understand any countries’ producer and consumer preferences for certain products.

scholarly journals Estimating Strawberry Attributes’ Market Equilibrium Values

HortScience ◽  
2017 ◽  
Vol 52 (5) ◽  
pp. 742-748
Author(s):  
Jong Woo Choi ◽  
Chengyan Yue ◽  
James Luby ◽  
Shuoli Zhao ◽  
Karina Gallardo ◽  
...  
Keyword(s):  
Demand Curve ◽  
Supply And Demand ◽  
Mixed Logit ◽  
Market Equilibrium ◽  
Mixed Logit Model ◽  
Logit Models ◽  
Total Revenue ◽  
Mixed Logit Models ◽  
Equilibrium Prices ◽  
Social Surplus

We conducted choice experiments with both strawberry producers and consumers. Consumer and producer willingness to pay (WTP) for the fruit attributes were estimated using mixed logit models. Through simulation using the mixed logit model results, we derived the market equilibrium prices, supply and demand curve, as well as quantities demanded and supplied for every fruit attribute. We found the highest equilibrium price was for strawberry internal color followed by flavor. Strawberry breeders can use the information when setting breeding targets, allocating resources appropriately during their breeding process and focusing on the improvement of attributes that produce the highest social surplus and total revenue.

Demand and Supply

2017 ◽  
Author(s):  
George C. Davis ◽  
Elena L. Serrano
Keyword(s):  
Food System ◽  
Supply And Demand ◽  
Market Equilibrium ◽  
Caloric Intake ◽  
Sugar Sweetened Beverages ◽  
Market Prices ◽  
Demand And Supply ◽  
Equilibrium Prices ◽  
Sweetened Beverages ◽  
Demand Curves

Chapter 14 introduces the ideas of consumer and producer sovereignty and addresses the questions: Who determines the prices and quantities of food in our food system? Consumers? Producers? Both? The chapter demonstrates that market prices and quantities occur where consumers and producers come together in the market as represented by the market supply and demand curves. The chapter shows how changes in demand and supply will affect prices and quantities in the market. Using the demand and supply framework, the chapter analyzes the expected impact of a proposed tax on sugar sweetened beverages to decrease caloric intake. The chapter ends with a demonstration and discussion of the effects of multiple changes in demand or supply on the market equilibrium prices and quantities.

Consumer preferences for grocery purchasing during the COVID-19 pandemic: a quantile regression approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Michelle Segovia ◽  
Jasper Grashuis ◽  
Theodoros Skevas
Keyword(s):  
Quantile Regression ◽  
Consumer Preferences ◽  
Time Windows ◽  
Mixed Logit ◽  
Home Delivery ◽  
Grocery Shopping ◽  
Minimum Order ◽  
Content Type ◽  
Individual Level ◽  
The Individual

PurposeThe objective is to determine if consumer preferences for grocery purchasing are impacted by the severity of the COVID-19 pandemic and whether these preferences differ by demographic and psychographic characteristics.Design/methodology/approachThe authors conduct an online discrete choice experiment (DCE) with 900 U.S. consumers to assess grocery shopping preferences under various scenarios of the COVID-19 pandemic (i.e. decreasing, constant and increasing cases). The attribute of interest is the purchasing method (i.e. in-store purchase, in-store pickup, curbside pickup and home delivery) with minimum order requirements, time windows and fees as secondary attributes. Heterogeneity in individual-level willingness-to-pay (WTP) estimates for the main attribute is analyzed by means of mixed logit and quantile regression techniques.FindingsThe mixed logit model reveals heterogeneity in WTP estimates for grocery purchasing methods across participants. According to estimates from quantile regressions, the heterogeneity is partly explained by the severity of the COVID-19 pandemic. For example, the home delivery purchasing method is less preferred when the number of cases is decreasing. The results also show that consumer preferences for grocery shopping methods are affected more by psychographic characteristics than demographic characteristics. Consumers who comply with COVID-19 directives (e.g. wear face coverings) have stronger preferences for curbside pickup and home delivery, particularly at the tails of the WTP distributions.Originality/valueAlthough there is much data on food consumer behavior during the COVID-19 pandemic at the aggregate level, there are few analyses of grocery shopping preferences at the individual level. The study represents a first attempt to relate individuals' demographic and psychographic characteristics to their grocery shopping preferences during the COVID-19 pandemic, thus yielding numerous recommendations in terms of consumer segmentation.

Impact of Qualitative Characteristics on Market Equilibrium: Simulation with Agent-Based Modeling

2017 ◽  
Vol 20 (02) ◽  
pp. 1750013
Author(s):  
Safae Badraoui ◽  
Khalid Bensaid ◽  
Ahmed Mouad El Haloui ◽  
Rajae Aboulaich
Keyword(s):  
Utility Function ◽  
Supply And Demand ◽  
Market Equilibrium ◽  
Ethical Aspect ◽  
Qualitative Characteristic ◽  
Individual Utility ◽  
Agent Based ◽  
Equilibrium Prices ◽  
Equilibrium Market ◽  
The Impact

This paper involves developing financial utility function that considers compliance to a certain qualitative characteristic and studies the impact on market equilibrium prices, should this criterion be Sharia compliance, fair-trade, environmental, social and governance principles or other ethical aspect. The goal is to show that individual utility can depend on other parameters than wealth and risk aversion, that therefore influence equilibrium market prices. This has been done by examining a possible utility function that takes into account individual sensitivity to the criterion and the intrinsic quality of compliance of this parameter. In order to prove the effectiveness of the proposed utility function, a simulation is made using agent-based approach with NetLogo platform. Upon examination of the impact of these parameters, it becomes clear that compliance to a qualitative characteristic would impact individual utility, supply and demand and result in equilibrium prices. This research highlights the importance of ethical arguments on individual decision making and how markets behave to this.

Consumers’ attitudes and willingness to pay for organic eggs

2019 ◽  
Vol 122 (2) ◽  
pp. 678-692 ◽  
Author(s):  
Osman Inanç Güney ◽  
Luca Giraldo
Keyword(s):  
Regression Analysis ◽  
Willingness To Pay ◽  
Choice Experiment ◽  
Consumer Preferences ◽  
Mixed Logit ◽  
Consumer Attitudes ◽  
Experiment Design ◽  
Cross Sectional ◽  
Content Type ◽  
Egg Consumption

Purpose The purpose of this paper is to understand consumer attitudes toward organic eggs by identifying their profiles and estimating the degree of their willingness to pay (WTP) for eggs with different attributes in order to evaluate the position of organic eggs. Design/methodology/approach Empirical data were collected from a face-to-face cross-sectional market survey, which involved a choice experiment design and a series of questions related to respondents’ attitudes and preferences in terms of organic egg consumption. A total of 552 consumers who are responsible for their household purchases were sampled, while the survey was performed in the major cities of seven regions of Turkey. The gathered data from the questions on consumer attitudes and preferences were analyzed using ordered probit, while the choice experiment data were analyzed through the use of conditional logit and mixed logit models. Findings Consumers perceive organic eggs to be healthy, nutritious and delicious food. In the study, we obtained three consumer groups (collectivist consumers, individualist consumers and reluctant consumers) with different characteristics in relation to organic egg consumption. When the motivations for organic egg consumption were analyzed, it was found that individual benefits have a greater impact than collectivist benefits on consumers’ choice to purchase organic eggs. According to the results of the regression analysis, consumers are willing to pay ₺0.76 more per egg for organic eggs compared to conventional eggs. Overall, consumers are reluctant to pay a premium in view of the functionality aspect of eggs. Research limitations/implications The results will help the actors within the egg industry to develop production and market-planning processes for differentiated egg markets according to consumer preferences and in terms of having the opportunity to select their ideal customer segments. Originality/value The research is the first study that analyses the motivations and the willingness of Turkish consumers to purchase organic eggs through using a choice experiment design and regression models. Original findings include the segmentation of consumers according to personal beliefs and norms. The research is also important in terms of comparing two regression model results in methodical terms. The similarity among the obtained results from the regression analysis increased the reliability of the study.

scholarly journals Spatial market equilibrium in the case of linear transportation costs

2020 ◽  
Vol 16 (4) ◽  
pp. 447-454
Author(s):  
Alexander Y. Krylatov ◽  
◽  
Yulia E. Lonyagina ◽  
Ruslan I. Golubev ◽  
◽  
...  
Keyword(s):  
Nonlinear Optimization ◽  
Supply And Demand ◽  
Market Price ◽  
Market Equilibrium ◽  
Transportation Costs ◽  
Unique Equilibrium ◽  
Optimization Program ◽  
Equilibrium Prices ◽  
Dual Variables

In this article, we study the spatial market equilibrium in the case of fixed demands and supply values, the requirement of equality in regard to overall supply and overall demand, and linear transportation costs. The problem is formulated as a nonlinear optimization program with dual variables reflecting supply and demand prices. It is shown that the unique equilibrium commodity assignment pattern is obtained explicitly via equilibrium prices. Moreover, it is proved that in order to obtain absolute values of equilibrium prices, it is necessary to establish a certain base market price. Therefore, once the base market price is given, then other prices are adjusted according to spatial market equilibrium.

scholarly journals Consumer preferences for organic vegetables in southwestern Nigeria: A choice experiment approach

2021 ◽  
Vol 16 (1) ◽  
pp. 1-13
Author(s):  
Joseph Akinwehinmi ◽  
◽  
Taye Amos ◽  
Kolawole Ogundari ◽  
◽  
...  
Keyword(s):  
Choice Experiment ◽  
Consumer Preferences ◽  
Mixed Logit ◽  
Third Party ◽  
Sub Saharan Africa ◽  
Southwestern Nigeria ◽  
Mixed Logit Models ◽  
Guarantee System ◽  
Sub Saharan ◽  
Safe Food

In sub-Saharan Africa, identifying estimates of consumers’ preferences and willingness to pay (WTP) for safe food continues to receive attention in the literature. Using experimental data from Nigeria, we examined the source of heterogeneities in preference and WTP for organically produced food. The subjective valuation by consumers of certification in relation to third-party certification and the participatory guarantee system (PGS) was also investigated. A sample of 196 households subjected to a discrete choice experiment yielded 1 764 observations that were analysed using the generalised multinomial logit and mixed logit models. The results reveal a strong preference for food safety in terms of reducing chemical residue, which dominated the respondents’ preference and WTP patterns. Concerning certification attributes, consumers were positively disposed to third-party certification, but showed no significant preference for the PGS form of certification. Significant heterogeneities in preference were due mainly to age and awareness of organic products. We suggest that policies should focus on consumers’ understanding of organic food, third-party certification, and organic agriculture

Numerically Stable Design Optimization With Price Competition

2012 ◽  
Author(s):  
W. Ross Morrow ◽  
Joshua Mineroff ◽  
Kate S. Whitefoot
Keyword(s):  
Engineering Design ◽  
Price Competition ◽  
Performance Metrics ◽  
Consumer Preferences ◽  
Mixed Logit ◽  
Sufficient Conditions ◽  
Mixed Logit Models ◽  
Game Theoretic ◽  
Pricing Problems ◽  
Decision Based Design

Researchers in Decision-Based Design have asserted that business objectives, e.g. profits, should replace engineering requirements or performance metrics as the objective for engineering design. Using profits as the objective for engineering design, however, requires modeling consumer preferences and competition between firms. Game theoretic “design-then-pricing” models—i.e. product design with price competition—provide an important framework for integrating consumer preferences and competition when design decisions must be made before prices are decided by a firm or by its competitors. This article proposes a method for solving design-then-pricing problems that exhibits improved efficiency and reliability, relative to existing methods. Numerical results for a vehicle design example using three solvers—matlab, KNITRO, and SNOPT—to validate this claim. We also highlight the importance of checking the Second-Order Sufficient Conditions in design-then-pricing problems that use Mixed Logit models of demand.

4. Markets

2014 ◽  
pp. 50-66
Author(s):  
Avinash Dixit
Keyword(s):  
Supply And Demand ◽  
Market Equilibrium ◽  
Product Price ◽  
Demand And Supply ◽  
Equilibrium Shift ◽  
Social Surplus

‘Markets’ focuses on the supply-and-demand nature of markets. The supply–demand mechanism produces just the quantity that contributes positive social surplus, and no more. The outcome maximizes the total social surplus; it is economically efficient. If underlying conditions of demand and supply change, market equilibrium will shift. Whether the product price and the quantity produced increase or decrease depends on the type of shift of demand and supply that has occurred. One cause of equilibrium shift is the imposition of a tax. Cycles of booms and busts in housing and mining sectors are discussed along with price floors and ceilings.

scholarly journals Poor consumers’ preferences for nutritionally enhanced foods

2019 ◽  
Vol 121 (3) ◽  
pp. 755-770 ◽  
Author(s):  
Rosina Wanyama ◽  
Theda Gödecke ◽  
Matthias Jager ◽  
Matin Qaim
Keyword(s):  
Urban Poor ◽  
Mixed Logit ◽  
Public Health Problem ◽  
Content Type ◽  
Mixed Logit Models ◽  
Price Increases ◽  
Different Types ◽  
Good Potential ◽  
Micronutrient Malnutrition ◽  
Practical Implications

Purpose Micronutrient malnutrition is a public health problem in many developing countries, especially in the poorest population segments. Fortification and other food-based approaches, such as using more nutritious ingredients in processing, could help to address this problem, but little is known about poor consumers’ attitudes toward nutritionally enhanced foods. The purpose of this paper is to analyze whether poor consumers in Africa would purchase foods with more nutritious ingredients and the related willingness and ability to pay. Design/methodology/approach A survey and choice experiment were conducted with 600 randomly selected households in the poorest neighborhoods of Nairobi (Kenya) and Kampala (Uganda). Participants were asked to choose between various alternatives of porridge flour with different types of nutritional attributes. The data were analyzed with mixed logit models. Porridge flour is widely consumed among the urban poor, so that the example can also provide interesting broader lessons. Findings Poor consumers welcome foods that are micronutrient-fortified or include new types of nutritious ingredients. However, willingness to pay for nutritional attributes is small. New ingredients that are perceived to have little effect on taste and appearance are seen more positively than ingredients that may change food products more notably. Practical implications New nutritionally enhanced foods have good potential in markets for the poor, if they build on local consumption habits and are not associated with significant price increases. Originality/value This is among the first studies to explicitly analyze poor consumers’ preferences for nutritionally enhanced foods.

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