Consumer’s willingness to pay for sustainable food products: do food miles labels matter?

Abstract

This paper analyses consumers’ preferences and willingness to pay for food products (i.e., almonds) carrying organic and/or “food miles” labels in Spain. Using data from a nonhypothetical choice experiment, a Random Parameter Logit model and an Error Component Random Parameter model with correlated errors are estimated to assess the effect of these labels on consumers’ utility. Results suggest that consumers are willing to pay more for a product with “food miles” label indicating that the product is locally grown than a product without “food miles” label. However, products with “food miles” labels denoting longer distances are valued less than products without “food miles” labels. Results imply that locally grown products are valued more than organic food products. Based on the marginal WTPs, our results also suggest that the least valued product would be the non-locally grown conventional almond. Relative to this product, respondents are willing to pay 0.61 € more for a non-locally grown organic product, 1.51 € more for a locally grown conventional product, and 2.12 € more for a locally grown organic product.