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    THREE ESSAYS ON THE ELICITATION OF WILLINGNESS-TO-PAY

    By

    LIJIA SHI

    A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT

    OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY

    UNIVERSITY OF FLORIDA

    2012

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    2012 Lijia Shi

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    To my parents

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    ACKNOWLEDGMENTS

    I would like to express my gratitude to my committee members: Dr. Lisa A. House,

    Dr. Zhifeng Gao, Dr. Kim Morgan and Dr. Chunrong Ai for their generous help and

    support in the completion of this dissertation.

    Most gratefully, I thank Dr. Lisa House and Dr. Zhifeng Gao for their generous help

    and continuous encouragement. They have been among the best mentors in the

    department and all my achievement during the last four years would not be possible

    without their support.

    Moreover, I want to thank Dr. Kim Morgan and Dr. Chunrong Ai for their valuable

    comments and suggestions. They are both respected professionals. I believe their help

    will also benefit me in my future studies.

    I would also appreciate the support from my fellow graduate students. They made

    my graduate life full of wonderful memories.

    Last but not least, I would like to take this opportunity to thank my family,

    especially my parents for their endless supports and love. Without them, my study

    would not be possible.

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    TABLE OF CONTENTS page

    ACKNOWLEDGMENTS .................................................................................................. 4

    LIST OF TABLES ............................................................................................................ 7

    LIST OF FIGURES .......................................................................................................... 8

    LIST OF ABBREVIATIONS ............................................................................................. 9

    ABSTRACT ................................................................................................................... 10

    CHAPTER

    1 INTRODUCTION .................................................................................................... 12

    1.1 Blueberry Market Review .............................................................................. 12 1.2 Consumer Willingness-to-Pay for Fruit Attributes ......................................... 13 1.3 Value Elicitation Method ............................................................................... 14

    2 CONSUMER WILLINGNESS-TO-PAY FOR BLUEBERRY ATTRIBUTES: A HIERARCHICAL BAYESIAN APPROACH IN THE WILLINGNESS-TO-PAY SPACE .................................................................................................................... 18

    2.1 Introduction ................................................................................................... 18 2.2 Consumer Attitudes for Food Attributes ........................................................ 21 2.3 The Choice Experiment and the Data ........................................................... 22 2.4 The Model ..................................................................................................... 24 2.5 Results .......................................................................................................... 26

    2.5.1 Mixed Logit Estimation Result .............................................................. 27 2.5.2 Consumers WTPs for Blueberry Attributes .......................................... 27 2.5.3 The Reliability of the Individual-Level Estimates .................................. 30 2.5.4 Willingness-to-pay and Demographics ................................................. 31

    2.6 Conclusion and Discussion ........................................................................... 31

    3 ON MODEL SPECIFICATION OF THE MIXED LOGIT: THE CASE OF CONSUMER PERCEPTION ON BLUEBERRY ATTRIBUTES .............................. 41

    3.1 Introduction ................................................................................................... 41 3.2 The Model ..................................................................................................... 45 3.3 Case Study: Consumer Preference for Blueberry Attributes ......................... 48 3.4 Results .......................................................................................................... 50 3.5 Conclusion and Discussion ........................................................................... 53

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    4 CONSUMERS WILLINGNESS-TO-PAY FOR ORGANIC AND LOCAL BLUEBERRIES: A MULTI-STORE BDM AUCTION CONTROLLING FOR PURCHASE INTENTIONS ..................................................................................... 58

    4.1 Introduction ................................................................................................... 58 4.2 Literature Review .......................................................................................... 61 4.3 Auction Procedure ........................................................................................ 64 4.4 Results .......................................................................................................... 65

    4.4.1 Partial Bids for Organic and Local Blueberries at Different Marketing Outlets ........................................................................................................... 66

    4.4.2 Impact of Purchase Intention ................................................................ 67 4.4.3 The Tobit Model for Full Bids ................................................................ 68 4.4.4 The OLS Regression for Partial Bids .................................................... 70

    4.5 Conclusion .................................................................................................... 71

    5 CONCLUSION ........................................................................................................ 77

    APPENDIX

    A CHOICE SITUATIONS FOR THE CHOICE EXPERIMENT .................................... 81

    B BDM AUCTION QUESTIONNAIRE ........................................................................ 84

    C BDM AUCTION INSTRUCTIONS AND PROCEDURE........................................... 89

    LIST OF REFERENCES ............................................................................................... 91

    BIOGRAPHICAL SKETCH ............................................................................................ 98

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    LIST OF TABLES

    Table page 2-1 Blueberry attributes and levels in the choice experiment ....................................... 34

    2-2 Demographics of choice experiment participants ................................................... 34

    2-3 Estimation results of the mixed logit model in the WTP space ............................... 35

    2-4 Summary statistics of respondents WTPs for local and U.S. produced ................. 36

    2-5 Summary statistics of respondents WTPs for organic ........................................... 36

    2-6 WTPs of three respondents ................................................................................... 37

    3-1 Literature comparing models from preference space and WTP space ................... 55

    3-2 Blueberry attributes and levels in the stated preference experiment ...................... 56

    3-3 Estimation results of the three models ................................................................... 56

    3-4 Means and variances of the individual-level WTP estimates ................................. 57

    3-5 Correlation between individual-level WTP estimates among the three models. ..... 57

    4-1 Demographics of participants at each marketing outlet .......................................... 73

    4-2 Summary statistics of bids ..................................................................................... 73

    4-3 Difference of mean bids across purchase intentions .............................................. 74

    4-4 WTPs at different locations .................................................................................... 74

    4-5 Tobit for reported bids ............................................................................................ 75

    4-6 Robust OLS for WTPs ............................................................................................ 76

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    LIST OF FIGURES

    Figure page 1-1 Total imports of fresh blueberries in the United States from 1993 to 2011. ............ 16

    1-2 Per capita consumption of fresh plus frozen blueberries in the United States from 1992 to 2010. ............................................................................................. 16

    1-3 Percentage of fresh use among total utilized production of blueberries from 2000 to 2011....................................................................................................... 17

    2-1 Scatterplots of WTP estimates versus demographic information.. ......................... 38

    2-2 Comparison of scale parameters for participants and non-participants. ................. 40

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    LIST OF ABBREVIATIONS

    HB Hierarchical Bayesian

    WTP Willingness-to-pay

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    Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of