Combining discrete and continuous mixing distributions to identify niche markets for food

Citation

Campbell D & Doherty E (2013) Combining discrete and continuous mixing distributions to identify niche markets for food. European Review of Agricultural Economics, 40 (2), pp. 287-312. https://doi.org/10.1093/erae/jbs018

Abstract
This paper explores the demand and willingness to pay (WTP) for value-added services to chicken. Since the demand for such services are likely to be highly segmented and often applies only to a market niche, models based on assumptions of homogeneity among consumers are likely to be inappropriate. For this reason, this paper combines discrete and continuous mixing distributions to concurrently identify the size of the niche market and the heterogeneity among consumers within the market niche. Failing to account for the niche market nature of value-added services is shown to have implications for predictions of WTP, demand and total revenue.

Keywords
choice experiments; mixed logit; value-added food; niche market; WTP space; price premium

Journal
European Review of Agricultural Economics: Volume 40, Issue 2