Dataset Information

Heterogeneity and nonlinearity in consumers' preferences: An application to the olive oil shopping behavior in Chile.

ABSTRACT: In relatively unknown products, consumers use prices as a quality reference. Under such circumstances, the utility function can be non-negative for a specific price range and generate an inverted U-shaped function. The extra virgin olive oil market in Chile is a good example. Although domestic production and consumption have increased significantly in the last few years, consumer knowledge of this product is still limited. The objective of this study was to analyze Chilean consumer preferences and willingness to pay for extra virgin olive oil attributes. Consumers were segmented taking into account purchasing frequency. A Random Parameter Logit model was estimated for preference heterogeneity. Results indicate that the utility function is nonlinear allowing us to differentiate between two regimes. In the first regime, olive oil behaves as a conspicuous good, that is, higher utility is assigned to higher prices and consumers prefer foreign products in smaller containers. Under the second regime, Chilean olive oil in larger containers is preferred.

SUBMITTER: Romo-Munoz RA

PROVIDER: S-EPMC5593193 | biostudies-literature | 2017

REPOSITORIES: biostudies-literature

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Heterogeneity and nonlinearity in consumers' preferences: An application to the olive oil shopping behavior in Chile.

Romo-Muñoz Rodrigo Alejandro RA Cabas-Monje Juan Hernán JH Garrido-Henrríquez Héctor Manuel HM Gil José María JM

PloS one 20170911 9

In relatively unknown products, consumers use prices as a quality reference. Under such circumstances, the utility function can be non-negative for a specific price range and generate an inverted U-shaped function. The extra virgin olive oil market in Chile is a good example. Although domestic production and consumption have increased significantly in the last few years, consumer knowledge of this product is still limited. The objective of this study was to analyze Chilean consumer preferences a ...[more]

PMID: 28892516

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Project description:BACKGROUND:Virtual stores can be used to identify influences on consumer shopping behavior. Deception is one technique that may be used to attempt to increase the realism of virtual stores. OBJECTIVE:The objective of the experiment was to test whether the purchasing behavior of participants in a virtual shopping task varied based on whether they were told that they would receive the products they selected in a virtual convenience store (a form of deception) or not. METHODS:We recruited a US national sample of 402 adult current smokers by email from an online panel of survey participants. They completed a fully automated randomized virtual shopping experiment with a US $15 or US $20 budget in a Web-based virtual convenience store. We told a random half of participants that they would receive the products they chose in the virtual store or the cash equivalent (intervention condition), and the other random half simply to conduct a shopping task (control condition). We tested for differences in demographics, tobacco use behaviors, and in-store purchases (outcome variable, assessed by questionnaire) by experimental condition. RESULTS:The characteristics of the participants (398/402, 99.0% with complete data) were comparable across conditions except that the intervention group contained slightly more female participants (103/197, 52.3%) than the control group (84/201, 41.8%; P=.04). We did not find any other significant differences in any other demographic variables or tobacco use, or in virtual store shopping behaviors, including purchasing any tobacco (P=.44); purchasing cigarettes (P=.16), e-cigarettes (P=.54), cigars (P=.98), or smokeless tobacco (P=.72); amount spent overall (P=.63) or on tobacco (P=.66); percentage of budget spent overall (P=.84) or on tobacco (P=.74); number of total items (P=.64) and tobacco items purchased (P=.54); or total time spent in the store (P=.07). CONCLUSIONS:We found that telling participants that they will receive the products they select in a virtual store did not influence their purchases. This finding suggests that deception may not affect consumer behavior and, as a result, may not be necessary in virtual shopping experiments.

Dataset Information

Heterogeneity and nonlinearity in consumers' preferences: An application to the olive oil shopping behavior in Chile.

Publications

Heterogeneity and nonlinearity in consumers' preferences: An application to the olive oil shopping behavior in Chile.

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