The Direct and Indirect Effects of ‘Locally Grown’ on Consumers’ Attitudes towards Agri-Food Products

Recent agricultural economics literature has largely analyzed consumers’ willingness to pay (WTP) for many credence attributes, including place of origin, organic, locally grown, environment friendly, fair trade, and animal welfare. In this study, we instead attempt to analyze why consumers value “locally grown,” which is a credence attribute receiving increasing attention in the market. Specifically, we propose a distinction between the direct effect and the indirect effect of “locally grown” on consumers’ attitudes towards agri-food products to explain consumers’ preferences for locally grown products. We collect data from an experiment with university students and analyze the data with a structural equation modeling methodology.