Influence of Brand Equity on Milk Choice: A Choice Experiment Survey

In the context of sustainable consumption buying local produce could support environmentally friendly production from the local economy. Our study estimates the preference weights that local consumers assign to some milk attributes including local origin and the influence on choice of a local brand of milk, which is traded by a local cooperative of producers in Umbria (Italy). In this paper, results from a study based on Discrete Choice Modelling on the effect of some intrinsic attributes on choice of milk were reported. We applied Mixed Logit and Latent Class Models with the aim of capturing taste heterogeneity across consumers of UHT and fresh milk in regards to the attributes of fat content, origin, nutrient intake, price and point of sale. The influence of a local brand on choice was addressed by applying Latent Class Model with the aim of verifying whether brand equity could be considered as a latent variable that influences class membership, determining preferences heterogeneity for some specific attributes. The classes estimated by LCL have shown differences in preferences related especially to brands and fat content. In regards to the methodology employed, two further improvements can be identified. Following Hynes et al., (2008), the first one consists of making milk attribute average estimates in the Mixed Logit Model conditional on brand equity factors with the aim of comparing the results from Mixed Logit with those already obtained by Latent Class Model. The second improvement aims at estimating how individual WTP for regional origin varies according to several socio-economic characteristics in the context of Mixed Logit model.