A Hedonic Analysis on the Implicit Values of Fresh Tomatoes

The food habits and dietary patterns of American consumers are changing and they are increasingly demanding food products that possess certain attributes relating to how the food was produced or processed. The objectives of the study are to analyze household purchase of fresh tomatoes and to determine the magnitudes of the price premium paid for the organic tomatoes by estimating a hedonic price model. The study uses the 2003 ACNielsen Homescan panel data. The data set represents a nationally representative panel of U.S. households, which provide food purchase data for at-home consumption. For empirical implementation, parameters of the hedonic model were estimated using the Box-Cox transformation procedure. The results indicated that consumers value the organic and packaging attributes positively and consistently among the major markets. The study found that the organic feature contributes $0.41/lb to the price of fresh tomatoes that consumers paid in the Northeast market. For other markets, the organic premiums were estimated to be $0.38/lb in the North Central and $0.26/lb in the Southeast and West. Furthermore, the results suggest that tomato prices vary by household characteristics, including income and age, education, and race and ethnicity of household head.