Who is willing to pay a premium for leafy greens produced by indoor agriculture? A comparative choice experiment with US consumers

Abstract

Indoor agriculture (IA) presents a pathway to producing leafy greens more sustainably by strictly controlling the growing environment, increasing the efficiency of water and land resources use, reducing pesticide application, and enhancing quality characteristics. However, the commercial success of adopting this production method depends on the technology's widespread consumer acceptance paired with a price premium for the improved quality it provides. This paper characterizes American consumer preferences for leafy greens, reports a positive WTP for leafy green attributes, and estimates how consumer attitudes toward IA affect their leafy green choices. The findings are drawn from an online survey of over 2000 US leafy green consumers conducted in 2021. The respondents faced a hypothetical discrete choice experiment (DCE) designed to simulate purchasing leafy green produce. The alternatives presented in the DCE varied over production systems (IA, field farming, or greenhouses) and quality levels (taste, freshness, nutrient level, and food safety). Estimates identify significant preference heterogeneity for leafy green attributes and facilitate classifying consumers into three preference-based groups: “Quality Seekers,” “Price Conscious,” and “Focused Practicals.” Preference variation is significantly greater for production methods than quality characteristics, indicating nascent production method preferences. Results suggest most US consumers view IA positively; however, WTP estimates vary significantly between consumer segments [EconLit Citations: D12, D13].