Hometown effect on consumer preferences for food products

Abstract

This study examines how consumers’ hometown orientation affects their preferences for food products. Regarding food products, consumers may prefer products from their hometown over those produced in other domestic areas, among other factors. We consider that due to population migration, a consumers’ current or local place of residence may not necessarily be their hometown. After defining the hometown effect with a framework of consumer willingness to pay, we apply a double-bounded dichotomous choice contingent valuation method to value the hometown effect on a rice product, based on a consumer survey conducted in Japan. This study reveals that consumers’ hometown orientation significantly affects their preferences for the rice product produced in their hometown. The magnitude of the hometown effect for the product is estimated at 48 JPY (0.44 USD) per kg in terms of consumer willingness to pay. The premium rate of the hometown effect compared with the price of the base product is 12.4%. Food labels indicating more detailed region of origin information could be a potential marketing strategy to appeal to consumers from that region but currently living in other areas.