Preferences and Willingness to Pay for the Nutritional Attributes of Breakfast Cereal by Midwestern Residents

S. R Dominick, Purdue University

Abstract

Nutrition can negatively impact the health of an individual in the form of malnutrition and can negatively impact the health of an economy in the form of lost productivity. Understanding consumer’s willingness to pay for nutrition can inform policy and education. Using a survey of 1,265 Midwestern residents, random parameters logit and latent class models were used to estimate the willingness to pay for the nutritional elements of ready-to-eat breakfast cereal. Males made up 49% of the total sample, 36% of respondents were aged 45 to 64, and 28% of the sample reported having at least one child in the household. Fifty percent of the sample reported looking for food that was affordable before looking at nutrition and 82% reported being consumers of ready-to-eat breakfast cereal. The impact of nutritional information on choice was examined and two subsamples were distinguished: those who saw the nutritional information prior to the choice experiment and those who did not. Willingness to pay was calculated for each nutrient attribute of a ready-to-eat breakfast cereal base product. Both samples experienced a mean disutility from not having ready-to-eat breakfast cereal as a choice and had a significant willingness to pay for sugar, fiber, and saturated fat attributes. Latent class models were estimated which resulted in two classes with in each subsample. The proportion of respondents likely to fall into the class who received utility from opting out of the selection of a product was higher for those who saw the nutritional information than for those who did not (50.4% compared with 40.0%). Age interaction terms in the random parameters logits and covariates in the latent class models suggest age was related to nutrition and product choices.

Degree

M.S.

Advisors

Widmar, Purdue University.

Subject Area

Economics|Agricultural economics|Nutrition

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