UVM Theses and Dissertations
Format:
Print
Author:
Dai, Jie
Title:
Dept./Program:
Community Development and Applied Economics
Year:
2005
Degree:
MS
Abstract:
This study examines the value consumers place on labels on fluid milk that provide information on the non-GMO process attributes regarding the use of rBST (recombinant bovine somatropin). Currently, two types of labeling inform consumers of the non-GM process attribute of milk: "rBST-free" and "organic." Previous literatures identified potential market for rBST-free and organic milk, but their primary focus was on the general market premium consumers are willing to pay. This study extends the previous research by further exploring the impacts of consumer socio-demographic characteristics on their valuations of non-GM process attributes. Both market level data and consumer survey data collected, including 1) market price of milk, 2) milk attributes including process attributes and other non-nutrient attributes such as container size and brand name, and 3), consumer socio-demographic characteristics. A hedonic model with interaction terms was applied to both datasets to capture the additional effects consumer characteristics have on their valuation of process attributes of milk.
The study found positive market premium for organic milk Consumers with older age, have children in the households were found to value "rBST-free" more while consumers with lower income tend to value to "rBST-free" less. Consumers with higher income level, higher age, and female consumers were found to value "organic" more while urban consumers tend to value the attribute less. Counter to our hypothesis and some of the previous studies, we did not find positive market premium for rBST-free milk. Urban consumers were found to value "organic" less than rural consumers. Consumers with higher educational level seem to value "rBST - free" less than the rest of the population. The results from this study provide guidelines to milk businesses on labeling and marketing milk with process attribute such as "rBST-free" and "organic," it also provides important evidence on using interaction terms in estimating consumer valuation of process attributes.
The study found positive market premium for organic milk Consumers with older age, have children in the households were found to value "rBST-free" more while consumers with lower income tend to value to "rBST-free" less. Consumers with higher income level, higher age, and female consumers were found to value "organic" more while urban consumers tend to value the attribute less. Counter to our hypothesis and some of the previous studies, we did not find positive market premium for rBST-free milk. Urban consumers were found to value "organic" less than rural consumers. Consumers with higher educational level seem to value "rBST - free" less than the rest of the population. The results from this study provide guidelines to milk businesses on labeling and marketing milk with process attribute such as "rBST-free" and "organic," it also provides important evidence on using interaction terms in estimating consumer valuation of process attributes.