Content area
Full text
ABSTRACT
Differentiation policies may help producers to receive fair prices for the provided quality and to reinvigorate the olive oil sector. In this paper we used the hedonic approach to study how extra virgin olive oil (EVOO) unit selling prices at retail level are correlated to the different characteristics of the individual unit. We found that consumers value the most EVOOs with a flavour profile, unfiltered, made from Italian olives, certified as organic, with origin designations and sold in small bottles. The main suggestion for farmers and agricultural associations is that there are possibilities for the olive oil sector to recover and improve its economic performance, provided that production and communication choices are able to effectively intercept preferences of different market segments.
KEYWORDS
Differentiation, Hedonic pricing method, Extra virgin olive oil, Italy.
(ProQuest: ... denotes formulae omitted.)
INTRODUCTION
While the extra virgin olive oil (EVOO) is widely recognized as an extremely valuable product, -in terms of nutritional properties, taste, cultural and gastronomic heritage and ecosystem services-, farmers often fail to receive a price adequate to fully cover production costs; thus, limiting the possibility of investments aimed at improving and further developing the sector. In Italy, extra virgin olive oil has not experienced the same valorization that has taken place in other sectors, such as cheese and wine, where over the years turnover and exports have recorded good growth rates.
Product differentiation has been seen as a way to make producers receive fair premium prices for the provided quality and to reinvigorate the sector. Understanding what are the product characteristics which are valued the most by consumers, is the first step for carrying out successful differentiation strategies.
Consumer Preferences for quality attributes are often analyzed through stated preference (SP) theory and methods. Traditional conjoint analysis (CA) and discrete choice experiments (DCEs) are widely used as stated preference elicitation methods and have been applied also to the olive oil market (Delgado and Guinard 2011). Alternatively, preference elicitation can be based on revealed preference (RP) approaches, stemming from data obtained by observing individual behavior in real markets. The most used RP approach is the hedonic pricing method (HPM). The basic idea of the HPM is that prices of a product can be influenced by different characteristics; the...