Skip to main navigation menu Skip to main content Skip to site footer
FrancoAngeli Journals

Regular Articles

Vol. 22 No. 1 (2020)

Does Italian origin really determine a price premium for fluid milk? Evidences from a hedonic price analysis

DOI
https://doi.org/10.3280/ecag1-2020oa10064
Submitted
giugno 22, 2020
Published
2020-06-22

Abstract

The regulation 1169/2011, which aims to protect the consumers in relation to food information, stresses the fact that the country of origin is become a key attribute for consumers in their purchasing decision. In 2014, the Italian Ministry of Agricultural, Food and Forestry Policies, with the Decree of 9 December 2016 − based on art. 26 of Reg. 1169/2011 – introduced the obligation of labelling the country origin of milk used in all dairy products and therefore for the first time for uht milk. In this context, the aim of the study is to evaluate the price premium of different quality attributes on uht milk sold in Italy, with particular regard to the country of origin of milk.
From the analysis, it emerges that Italian origin of milk has a significant and positive effect on price, together with the type of retailer (i.e. hypermarket), notorious brands, plastic packaging, high and middle placement on the shelves, organic attribute and the enrichment with omega 3, phosphorus or fibre.

References

  1. Abraben, L.A., Grogan, K.A. & Gao, Z. (2017). Organic price premium or penalty? A comparative market analysis of organic wines from Tuscany. Food policy, 69, 154-165, doi: 10.1016/j.foodpol.2017.04.005.
  2. Bimbo, F., Bonanno, A., Liu, X. & Viscecchia, R. (2016). Hedonic analysis of the price of uht-treated milk in Italy. Journal of dairy science, 99(2), 1095-1102, doi: 10.3168/jds.2015-10018.
  3. Boatto, V., Defrancesco, E. & Trestini, S. (2011). The price premium for wine quality signals: does retailers’ information provision matter?. British Food Journal, 113(5), 669-679.
  4. Bronnmann, J. & Hoffmann, J. (2018). Product differentiation in the German soft drink market: which attributes matter?. Applied economics letters, 25(14), 968-971, doi: 10.1080/13504851.2017.1388906.
  5. Cagnina, M.R., Cosmina, M., Gallenti, G., Marangon, F., Nassivera, F. & Troiano, S. (2018). The role of information in consumers’ behavior: A survey on the counterfeit food products. Economia Agro-Alimentare, doi: 10.3280/ECAG2018-002007.
  6. Caracciolo, F., Cembalo, L. & Pomarici, E. (2013). The hedonic price for an Italian grape variety. Italian Journal of Food Science, 25(3), 289.
  7. Carew, R., Florkowski, W.J. & Smith, E.G. (2012). Hedonic analysis of apple attributes in metropolitan markets of Western Canada. Agribusiness, 28(3), 293-309, doi: 10.1002/agr.21302.
  8. Cicia, G., Cembalo, L., Del Giudice, T. & Scarpa, R. (2013). Country-of-origin effects on Russian wine consumers. Journal of Food Products Marketing, 19(4), 247-260, doi: 10.1080/10454446.2013.724369.
  9. Costanigro, M., McCluskey, J.J. & Mittelhammer, R.C. (2006). Identifying submarket in the wine industry: a multivariate approach to hedonic regression (No. 379-2016-21721). presented at American Agricultural Economics Association Annual Meeting. Long beach California.
  10. Costanigro, M., McCluskey, J.J. & Mittelhammer, R.C. (2007). Segmenting the wine market based on price: hedonic regression when different prices mean different products. Journal of agricultural Economics, 58(3), 454-466, doi: 10.1111/j.1477-9552.2007.00118.
  11. Erdem, T., Swait, J. & Valenzuela, A. (2006). Brands as signals: a cross-country validation study. Journal of marketing, 70(1), 34-49, doi: 10.1509%2Fjmkg.70.1.034.qxd.
  12. FAO (2019). Overview of global dairy market developments in 2018. Dairy Market Review, March, 2019 Rome. -- Available at www.fao.org/3/I9210EN/i9210en.pdf.
  13. Huang, C.L. & Lin, B.H. (2007). A hedonic analysis of fresh tomato prices among regional markets. Review of agricultural economics, 29(4), 783-800, doi: 10.1111/j.1467-9353.2007.00387.x.
  14. ISMEA (2019). Lattiero caseari: tendenze e dinamiche recenti. Redazione a cura di: Mariella Ronga. -- Available at: www.ismeamercati.it/flex/cm/pages/ServeBLOB.php/L/IT/IDPagina/9479.
  15. Keller, K.L. (2013). Building, Measuring, and Managing Brand Equity. 4th ed. India: Pearson Education.
  16. Kennedy, P.E. (1981). Estimation with correctly interpreted dummy variables in semilogarithmic equations [the interpretation of dummy variables in semilogarithmic equations]. American Economic Review, 71(4), 801-801.
  17. Lancaster, K.J. (1966). A new approach to consumer theory. Journal of political economy, 74(2), 132-157.
  18. Lancaster, K. (1971). Consumer demand: a new approach. 5th ed. New York: Columbia University Press.
  19. Lawless, L.J., Drichoutis, A.C., Nayga Jr, R.M., Threlfall, R.T. & Meullenet, J.F. (2015). Identifying Product Attributes and Consumer Attitudes that Impact Willingness to pay for a Nutraceutical‐Rich Juice Product. Journal of Sensory Studies, 30(2), 156-168, doi: 10.1111/joss.12148.
  20. Lefèvre, M. (2014). Do consumers pay more for what they value more? The case of local milk-based dairy products in Senegal. Agricultural and Resource Economics Review, 43(1), 158-177, doi: 10.1017/S1068280500006961.
  21. Li, W.K. & Wyer Jr, R.S. (1994). The role of country of origin in product evaluations: Informational and standard‐of‐comparison effects. Journal of Consumer psychology, 3(2), 187-212, doi: 10.1016/S1057-7408(08)80004-6.
  22. Liem, D.G., Bolhuis, D.P., Hu, X. & Keast, R.S.J. (2016). Influence of labeling on Australian and Chinese consumers’ liking of milk with short (pasteurized) and long (uht) shelf life. Journal of dairy science, 99(3), 1747-1754, doi: 10.3168/jds.2015-10516.
  23. Loke, M.K., Xu, X. & Leung, P. (2015). Estimating organic, local, and other price premiums in the Hawaii fluid milk market. Journal of dairy science, 98(4), 2824-2830, doi: 10.3168/jds.2014-8867.
  24. McCluskey, J.J. (2000). A game theoretic approach to organic foods: An analysis of asymmetric information and policy. Agricultural and Resource Economics Review, 29(1), 1-9, doi: 10.1017/S1068280500001386.
  25. McConnell, K.E. & Strand, I.E. (2000). Hedonic prices for fish: tuna prices in Hawaii. American Journal of Agricultural Economics, 82(1), 133-144, doi: 10.1111/0002-9092.00011.
  26. Orrego, M.J.E., Defrancesco, E. & Gennari, A. (2012). The wine hedonic price models in the “Old and New World”: state of the art. Revista de la Facultad de Ciencias Agrarias, 44(1), 205-220.
  27. Otter, V., Prechtel, B. & Theuvsen, L. (2014). The Country-of-Origin Effect for Chocolate made from Ecuadorian Cocoa: An Empirical Analysis of Consumer Perceptions. Economia Agro-Alimentare, doi: 10.3280/ECAG2014-003005.
  28. Pilone, V., Stasi, A. & Baselice, A. (2017). Quality preferences and pricing of freshcut salads in Italy: new evidence from market data. British Food Journal, 119(7), 1473-1486.
  29. Reis, F., Alcaire, F., Deliza, R. & Ares, G. (2017). The role of information on consumer sensory, hedonic and wellbeing perception of sugar-reduced products: Case study with orange/pomegranate juice. Food Quality and Preference, 62, 227-236, doi: 10.1016/j.foodqual.2017.06.005.
  30. Roheim, C.A., Asche, F. & Santos, J.I. (2011). The elusive price premium for ecolabelled products: evidence from seafood in the UK market. Journal of Agricultural Economics, 62(3), 655-668, doi: 10.1111/j.1477-9552.2011.00299.x.
  31. Roselli, L., Carlucci, D., Rover, O.J. & De Gennaro, B. (2018). The effects of extrinsic cues on olive oil price in Brazil. Journal of International Food & Agribusiness Marketing, 30(1), 70-87, doi: 10.1080/08974438.2017.1387883.
  32. Rosen, S. (1974). Hedonic prices and implicit markets: product differentiation in pure competition. Journal of political economy, 82(1), 34-55.
  33. Rossetto, L. & Galletto, L. (2019). Retail strategies for rosé wines in Italy: a hedonic price analysis. International Journal of Wine Business Research.
  34. Satimanon, T. & Weatherspoon, D.D. (2010). Hedonic analysis of sustainable food products. International Food and Agribusiness Management Review, 13(1030-2016-82887), 57-74.
  35. Smith, T.A., Huang, C.L. & Lin, B.H. (2009). Estimating organic premiums in the US fluid milk market. Renewable agriculture and food systems, 24(3), 197-204, doi: 10.1017/S1742170509002579.
  36. Solomon, M.R., Dahl, D.W., White, K., Zaichkowsky, J.L. & Polegato, R. (2014). Consumer behavior: Buying, having, and being (vol. 10). Toronto, Pearson. Ed.
  37. Steenkamp, J.B.E. (1989). Product quality: An investigation into the concept and how it is perceived by consumers.
  38. Szathvary, S. & Trestini, S. (2014). A hedonic analysis of nutrition and health claims on fruit beverage products. Journal of Agricultural Economics, 65(2), 505-517, doi: 10.1111/1477-9552.12056.
  39. Tempesta, T. & Vecchiato, D. (2013). An analysis of the territorial factors affecting milk purchase in Italy. Food Quality and Preference, 27(1), 35-43, doi: 10.1016/j.foodqual.2012.06.005.
  40. Trestini, S., Giampietri, E., Szathvary, S. & Dal Bianco, A. (2018). Insights on the Alleged Imitation of Prosecco Wine Name: The Case of the German Market. International Journal on Food System Dynamics, 9(4), 331-341, doi: 10.18461/ijfsd.v9i4.944.
  41. Underwood, R.L., Klein, N.M. & Burke, R.R. (2001). Packaging communication: attentional effects of product imagery. Journal of product & brand management, 10(7), 403-422.
  42. Verlegh, P.W. & Steenkamp, J.B.E. (1999). A review and meta-analysis of countryof- origin research. Journal of economic psychology, 20(5), 521-546, doi: 10.1016/S0167-4870(99)00023-9.
  43. Zabbia, A., Buys, E.M. & De Kock, H.L. (2012). Undesirable sulphur and carbonyl flavor compounds in uht milk: a review. Critical reviews in food science and nutrition, 52(1), 21-30, doi: 10.1080/10408398.2010.487166.
  44. Zhang, D., Sogn-Grundvåg, G., Asche, F. & Young, J. (2018). Eco-labeling and retailer pricing strategies: The UK haddock market. Sustainability, 10(5), 1522, doi: 10.3390/su10051522.

Metrics

Metrics Loading ...