Factors Influencing the Purchase of Live Seafood in the North Central Region of the United States

Transcription

1 Marne Resource Economcs, Volume 26, pp /00 $ Prnted n the U.S.A. All rghts reserved. Copyrght 2011 MRE Foundaton, Inc. Factors Influencng the Purchase of Lve Seafood n the North Central Regon of the Unted States Kwamena K. Quagrane A Xng Kevn G. Hughes Purdue Unversty Abstract Ths study assesses the preferences of shoppers of lve seafood products n the North Central Regon of the US accountng for heterogenety n ther preferences. The results suggest that qualty assurance consderatons and hgh ncomes are factors that would ncrease the probablty of hgher expendtures on lve fsh/ shellfsh. The purchase of saltwater fsh and shellfsh also ncreased the probablty of hgher expendtures. The North Central Regon produces freshwater seafood, and mantanng fsh qualty through the producton process s mportant to ths nche market. Shoppers also purchased lve seafood frequently, sgnfyng the mportance of avalablty. Key words Lve fsh, preferences, random parameters ordered probt. JEL Classfcaton Codes Q11, Q21, Q22. Introducton Consumer demand s a predomnant area of market research where researchers attempt to understand the determnants of consumer purchase behavor gven product dversty and consumer heterogenety. There s an ncreasng trend n demand for fsh products through the non-tradtonal retal grocery sector, such as ethnc food markets, and fresh and lve seafood products feature promnently n the expanson of the sector (Ewart 1996). Chnese and other Asan food stores, restaurants, seafood dstrbutors, and retalers are the prncpal market outlets for lve fsh. Shoppers at ethnc stores demand food tems that are perceved to be fresh, healthy, nutrtous, and safe. Qualty and safety s becomng ncreasngly mportant for seafood because fsh retalers offer an array of seafood products ncludng fresh, frozen, processed, and canned seafood. Seafood products are wdely dverse, wth a range of speces and product attrbutes; therefore, qualty ssues become complex, especally wth dversty of producton, processng, markets, speces, and forms n whch seafood s consumed (Allshouse et al. 2004). Dochtermann (1996) emphaszed the need to mantan qualty throughout the growth cycle f fsh s meant for the lve market. To our knowledge, lttle, f any, economc research has been conducted to examne the lve fsh market. Lve fsh are a delcacy n Asan cusne, and fsh producers are explorng opportuntes n ths expandng food market. The sale of lve seafood n ethnc Kwamena K. Quagrane s an aquaculture marketng specalst and A Xng s a research assstant, Department of Agrcultural Economcs, Purdue Unversty, 403 W. State St., West Lafayette, IN USA (emal: kquagra@purdue.edu and axng@purdue.edu, respectvely). Kevn G. Hughes s a research assstant, School of Electrcal and Computer Engneerng, Purdue Unversty, 465 Northwestern Ave., West Lafayette, IN USA (emal: kghughes@purdue.edu). 59

2 60 Quagrane, Xng, and Hughes markets presents a vable channel for fsh farmers to obtan prce premums and avods the need to nvest n value-addng actvtes to compete wth mported seafood products. Targetng consumers who purchase lve fsh presents a good potental for sales growth for fsh farmers and for the development of a long-term marketng relatonshp between fsh farmers and ethnc food stores. Shoppers at ethnc food markets have spendng patterns, shoppng habts, and food preferences that are assocated wth ther ethnc cultural hertage and tradtons. These all represent opportuntes for the aquaculture ndustry. Pudur et al. (2010), Myers et al. (2010), and Ewart (1996) reported that Asans were the man customer base for the lve seafood market n the northeastern US, but Caucasans, Hspancs, and Afrcans also consttuted a sgnfcant ethnc make-up of ther clentele. Degner et al. (1994) also arrve at a smlar concluson that Asans consume more lve seafood than other ethnc groups. Studyng the ethnc lve fsh market n the North Central Regon of the US s of partcular mportance to fsh farmers there because they are manly small farmers, and such nche opportuntes appear more vable than tradtonal seafood channels that handle mostly processed seafood products. The regon currently accounts for less than 1% of total US aquaculture producton wth the producton of some major food/sport fsh and shellfsh, such as yellow perch, hybrd strped bass, tlapa, trout, freshwater prawns, catfsh, largemouth bass, smallmouth bass, and sunfsh/bluegll (USDA-NASS 2007). The ethnc lve fsh market offers nche marketng opportuntes and ncome potental for small-scale farmers, but the challenge s to assess consumer preferences for lve fsh gven ther dversty. To develop and sustan marketng of farmed fsh through ethnc food markets, fsh farmers need to dentfy factors that affect the preferences of shoppers at these food markets. Knowledge of these factors can be utlzed to develop marketng strateges that are proactve n terms of targetng shoppers who are lkely to purchase lve fsh. The purpose of ths study s to assess the preferences of shoppers of lve fsh products n the North Central Regon of the US accountng for heterogenety n ther preferences. The nfluence of varous perceved attrbutes of lve fsh, as well as the demographc and socoeconomc characterstcs of respondents are nvestgated. Materals and Methods Theoretcal Framework Preference analyss s an essental component of studyng ndvdual choce behavor and has been appled n consumer demand for seafood. Studes have utlzed both real and hypothetcal data on seafood attrbutes to evaluate consumer choce behavor (Johnston et al. 2001; Myrland et al. 2000; Larkn and Sylva 1999; Holland and Wessells 1998; Gempesaw et al. 1995). The modelng approach usually nvolves a taxonomy of determnants of consumer choce behavor that can be categorzed as related to the seafood product, ndvdual person, and envronment. Characterstcs of the product, as well as socal/cultural and envronmental factors jontly shape perceptons of foods. Werenga (1983) and Steenkamp (1993) suggest that product attrbutes can be categorzed nto three aspects: sensory (consumptve), functonal (beneft), and expressve (symbolc). The sensory propertes of a product are assumed to be related to feelngs n consumng the product, whle functonal attrbutes are assumed to perform certan functons relevant to the consumer; e.g., health benefts and convenence benefts related to use. The expressve attrbutes refer to expressons of tradtons, exclusveness, status, etc. Indvdual attrbutes are also mportant n choce analyss. In the case of preferences for lve fsh, a shopper s preference could be affected by needs, motves, soco-cultural background, and stuatonal elements. Thus, the overall preference for lve fsh products could be the result of shoppers perceptons and belefs about the product coupled wth some

3 Lve Seafood Demand n the North Central Regon 61 underlyng soco-economc characterstcs, and there s lkely to be some unobserved heterogenety among shoppers gven the dverse clentele (Ewart 1996; Degner et al. 1994; Myers et al. 2010; Pudur et al. 2010). Heterogenety among consumers n the emprcal lterature s generally consdered by ncorporatng demographc factors drectly n demand functons or through the utlty functon (e.g., Lusk, Roosen, and Fox 2003; Platter et al. 2005). Other emprcal economc analyses consder preference heterogenety by clusterng or stratfyng consumers nto varous segments and estmatng demands separately on each segment (Holland and Wessells 1998; Morey, Rowe, and Watson 1993). For these analyses, economsts sometmes use nteractons of demographc varables and product attrbutes to account for heterogeneous preferences. Incorporatng heterogenety nto choce analyss requres some knowledge of the elements of heterogenety. Possble sources of heterogenety n the demand for lve fsh nclude demographcs, socal/cultural factors, consumer atttudes, and perceptons. Recent flexble choce models account for ndvdual heterogenety n the estmaton of the choce parameters. Examples nclude the random parameters (mxed) choce models of Revelt and Tran (1998), the latent class choce model of Mc- Fadden (1986), and the random parameter ordered choce model of Greene (2008) and Greene and Hensher (2008). Ordered Probt Model In ths study, the concept of demand for lve fsh s examned wth the use of an ordered probt model to analyze shoppers expendtures on lve fsh. The ordered choce model assumes that the dependent varable depends on a latent varable, y *, whch s observed by y. The latent regresson s expressed as: y * = β' x + ε, ε ~ N[0,1], (1) where β s a vector of parameters to be estmated, x s vector of covarates, and ε s dsturbance. The latent varable, y *, s observed n the form of dscrete measures through a censorng mechansm expressed as: y = 0 f y * μ 0, = 1 f μ 0 < y * μ 1, = 2 f μ 1 < y * μ 1 (2) =... = J f μ J 1 < y * μ J. The μs are unknown cut off or threshold parameters, whch separate the adjacent categores and are estmated wth the βs. The probabltes assocated wth the observed categorcal outcomes are expressed as: P( y P( y P( y 0 x ) 1 x ) 3 x ) F( ' x ) F( ' x ) F( ' x ) F( ' x ), 3 0 (3) where F(.) s the cumulatve dstrbuton functon of ε. For the ordered probt model, F(.) takes the form of a normal dstrbuton.

4 62 Quagrane, Xng, and Hughes The basc ordered probt model outlned above assumes a homogeneous populaton and thresholds n the observaton mechansm;.e., that the thresholds μ j are the same for every ndvdual n the sample. Ths mples fxed parameters n the basc model. Such an assumpton may be unrealstc because of ndvdual varaton and some underlyng heterogenety among shoppers (Greene 2008; Greene and Hensher 2008; Greene 2007). To account for a possble latent heterogenety, Greene and Hensher (2008) suggests a random parameters probt (RPOP) model of the form: y * x x. ; where ' x x u, u, ~ N[0, ] ' ' var[ x u ] 1 x x u (4) In terms of probablty, equaton (4) provdes the condtonal probablty dstrbuton, whch can be expressed as: P( y j x, ) F[ j, u,( ' x )], j 0,1,, J. (5) The probablty functon s estmated usng maxmum smulated lkelhood estmaton procedures. See Greene (2008) and Greene and Hensher (2008) for further computatonal detals. A framework of shoppers preferences for lve fsh s developed based on the RPOP model outlned above. The framework ncorporates a latent construct of demand for lve fsh as observed categores of shoppers expendtures on lve fsh/shellfsh. Estmaton of the μs and βs parameter vectors n equatons (3) and (5) was performed va maxmum lkelhood methods usng LIMDEP Verson 9 (Greene 2007). The random parameters were assumed to be ndependently normally dstrbuted n the populaton. The standard devatons reflect the devaton n ndvdual preferences n the populaton. Data The study covered a fve-month perod from June through August, and then October/ November, 2008, by means of an ntercept survey of shoppers at Asan food stores n selected ctes n the North Central Regon of the US. Seventy eght (78) Asan food stores were dentfed from cty yellow page books, nternet searches, and ndustry contacts. These stores were contacted by phone and emal to nqure f they sold lve fsh. Twenty eght (28) stores that sold lve fsh and voluntarly agreed to partcpate n the study were vsted. The number of stores vsted were Indanapols (5), West Lafayette (2), Fort Wayne (1), and Evansvlle (1) n Indana; Columbus (2), Farfeld (1), Cncnnat (2), and Cleveland (2) n Oho; and Chcago (12) n Illnos. Permsson was obtaned from store owners and managers to ntervew ther customers. As an ncentve for both shoppers and store managers, a $3 coupon was gven to each shopper who completed a survey to be redeemed at the partcpatng store. The stores were rembursed for the total amount of coupons receved at the end of the survey perod. Stores were vsted on two dfferent occasons n the summer and early fall, and some shoppers were ntercepted on more than one occason. Therefore, the data set s

5 Lve Seafood Demand n the North Central Regon 63 an unbalanced panel because t ncludes more than one observaton of some shoppers. Data were collected usng a questonnare. Shoppers who ndcated Englsh as ther frst language were gven the questonnare along wth an explanaton of how to complete t on ther own. For shoppers who ndcated Chnese as ther preferred language, Chnese enumerators asssted them n completng the questonnare. Table 1 provdes the summary statstcs of the data used n the emprcal model to assess consumer preferences for lve fsh products. A total of 461 customers were approached for the survey and 361 partcpated, gvng a response rate of 78%. Of ths number, 44% were females and 46% were males. Forty-sx percent (46%) of the respondents were between 36 and 50 years of age, 36% from 21 to 35, 13% from 51 to 65, and 5% were over 65. More than half of the shoppers had a household sze of three to fve persons. Thrty-two percent (32%) had up to two ndvduals n ther household, 9% had sx to eght, and less than 1% had more than eght persons. Respondents came from 29 dfferent countres and fve major regons of the world. The majorty (53%) were from Asa, 31% were from the US, 8% were from Afrca, 6% were from Latn Amerca/Carbbean and 1% was from Europe. The household ncome range of most (62%) respondents was $30,001 $100,000 per year. Those earnng $30,000 and below were 15%, and customers earnng between $100,001 and $150,000 per year were 14%. Very few people (9%) made more than $150,000 (table 1). The value of lve fsh/shellfsh purchased per vst vared among shoppers; 23% of shoppers spent up to $10 per vst, 50% of shoppers spent from $11 to $20 per vst, 17% spent from $21 to $30 per vst, and 10% more than $30 on fsh/shellfsh per vst. Most shoppers ndcated they purchased freshwater fsh (84%), followed by shellfsh (48%), and saltwater fsh (38%). Asked about the type of fsh they purchased, a total of 56 dfferent speces of fsh were ndcated by respondents. The most popular speces purchased were tlapa, catfsh, and shrmp. These three speces consttuted about 40% of the total fsh/shellfsh speces purchases. When asked how they processed the lve fsh purchased, 63% of respondents ndcated the fsh was purchased lve and processed n the store, whle the remanng 37% purchased lve fsh and processed t at home. Regardng quantty purchased per vst, almost 80% of the shoppers ndcated less than 11 lbs. of fsh per vst. About 56% of the shoppers purchased less than 6 lbs., 23% purchased 6 to 10 lbs., 8% purchased 11 to 15 lbs., 6% purchased 16 to 20 lbs., and 5% purchased over 21 lbs. of fsh per vst. The smallest quantty of fsh purchased was 0.5 lb., and the largest quantty purchased was 50 lbs. per vst. The average quantty purchased per vst was about 8 lbs. (table 1). A number of customers traveled a relatvely short dstance to purchase lve fsh. Approxmately 62% travelled less than 10 mles. The most frequently ndcated dstances travelled were 5, 10, 15, and 20 mles, whch were 13, 14, 9, and 12%, respectfully. Regardng frequency of fsh purchase, 30% of the shoppers purchased fsh/shellfsh weekly, 28% purchased fsh every two weeks, 18% purchased fsh monthly, and 10% purchased fsh once every two months and occasonally. Shoppers purchased lve fsh for a number of reasons. Freshness was the major reason ndcated by 60% of respondents; qualty assurance, 33%; and tradton, 22%. As to the fsh attrbutes shoppers consdered mportant when purchasng lve fsh, 87% specfed that prce was mportant, and about 76% ndcated that sze was mportant.

6 64 Quagrane, Xng, and Hughes Table 1 Descrptve Statstcs of Model Varables (N = 361) Varable Varable Defnton Mean Std. Dev. Range Dependent Varable Expendture on lve y0 = up to $ fsh/shellfsh per vst y1 = $11 $ y2 = $21 $ y3 = more than $ Monthly quantty Quantty of lve fsh purchased per month (lb.) Dstance travelled Dstance travelled to purchase lve fsh (mles) Seafood Type Freshwater fnfsh = 1 f respondent purchases freshwater fnfsh, 0 otherwse Saltwater fnfsh = 1 f respondent purchases saltwater fnfsh, 0 otherwse Shellfsh = 1 f respondent purchases shellfsh, 0 otherwse Purchase Frequency Weekly = 1 f respondent purchases lve fsh up to once a week, 0 otherwse Bweekly = 1 f respondent purchases lve fsh bweekly, 0 otherwse Monthly = 1 f respondent purchases lve fsh monthly, 0 otherwse Ratonale Qualty assurance = 1, f the reason for purchasng lve fsh s qualty assurance, 0 otherwse Freshness = 1, f the reason for purchasng lve fsh s freshness, 0 otherwse Tradton = 1, f the reason for purchasng lve fsh s tradton, 0 otherwse Attrbutes Prce s mportant = 1, f respondent ndcates prce s mportant when purchasng lve fsh, 0 otherwse Sze s mportant = 1, f respondent ndcates sze s mportant when purchasng lve fsh, 0 otherwse Natve Regon Asan = 1 f respondent s natve regon s Asa, 0 otherwse Amercan = 1 f respondent s natve regon s USA, 0 otherwse Other = 1 f respondent s natve regon s not Asa or USA (omtted varable).

7 Lve Seafood Demand n the North Central Regon 65 Table 1 (contnued) Descrptve Statstcs of Model Varables (N = 361) Socoeconomc Factors Household sze The sze of respondent s household Income0 = 1 f household ncome s $30, or below (omtted varable) Income1 = 1 f household ncome s $30,001 $100,000, 0 otherwse Income2 = 1 f household ncome s $100,001 $150,000, 0 otherwse Income3 = 1 f household ncome s above $150,000, 0 otherwse Applcaton of Ordered Probt Choce To measure demand for lve fsh/shellfsh, shoppers were asked to ndcate ther average expendture on lve fsh/shellfsh per store vst among the followng categores: up to $10, $11 to $20, $21 to $30, and more than $30. Ths nformaton s mportant because, n the food marketng system, economc decsons by producers and consumers jontly determne market outcomes, and the consumer s food budget s relevant to ths process. Fsh farmers targetng the lve fsh market need to know the spendng habts of shoppers of lve fsh/ shellfsh. Thus, the dependent varable was constructed as four ordered categores from 0 to 3, respectvely, for shoppers spendng up to $10 per vst on lve fsh/shellfsh, $11 to $20 per vst, $21 to $30 per vst, and more than $30 on fsh/shellfsh per vst. Demand for lve fsh/shellfsh may be nfluenced by a multtude of factors, and by observng those factors, fsh producers may make better-nformed farmng decsons. For example, n the tradtonal agrculture sector, producers have responded to consumer demand for leaner meats and low-fat dary products. The ndependent varables n ths study were chosen to best represent fve categores of factors: seafood type, frequency of purchase, ratonale for purchasng lve fsh/shellfsh, fsh/shellfsh attrbutes, natve regon, and socoeconomc factors. Also ncluded were the quantty of lve fsh/shellfsh purchased per month and dstance traveled to purchase lve fsh/shellfsh. These factors are hypotheszed to affect how much shoppers spend on lve fsh/shellfsh per vst. Pudur et al. (2010), Myers et al. (2010), and Ewart (1996) lst several speces of seafood that are sold n lve fsh markets that can be categorzed nto freshwater fnfsh, marne fnfsh, and shellfsh. These categores were consdered factors affectng expendtures. The supply of a gven type of seafood s very mportant and depends on the prce, source, and other economc and envronmental factors. Fsh farmng has the advantage over capture fsheres n that t can better manage supply f the speces can be farmed or cultured. The ratonale varables consdered are derved from the reasons shoppers ndcated for purchasng lve fsh/shellfsh, ncludng assurance of qualty, freshness, and tradton. Pudur et al. (2010) and Myers et al. (2010) found that freshness and qualty were more valued for lve fsh by respondents than prce, avalablty, and other attrbutes. That study reported that none of the respondents ndcated freshness as Not Important and concluded that a good physcal appearance of fsh reflected fsh qualty and could attract hgher premums because the fsh survve longer n the store, have greater meat yelds, and may also have better flesh qualty (Pudur et al. 2010; Myers et al. 2010). The fsh/shellfsh attrbutes consdered n the study are prce and sze. Respondents were asked to ndcate f these were mportant factors to them n ther purchase dec-

8 66 Quagrane, Xng, and Hughes sons for lve fsh/shellfsh. The emprcal lterature generally supports the sgnfcance of prce, sze, and freshness on seafood demand (e.g., Kumar, Quagrane and Engle 2008; Quagrane 2006; House et al. 2002; House, Hanson and Sureshwaran 2003; Gempesaw et al. 1995; Ewart 1996; Dochtermann 1996; Herrmann et al. 1994; Engle et al. 1990). Shoppers of lve fsh from ethnc markets are beleved to have some tradtons relatng to preference for lve fsh (Pudur et al. 2010; Myers et al. 2010; Degner et al. 1994). The majorty of respondents ndcated ethncty as Asan (53%) and Amercan (31%). Asan countres ndcated by respondents ncluded Japan, Korea, Chna, Hong Kong, Tawan, Vetnam, Burma, Sngapore, Phlppnes, Inda, and Bangladesh. Consumers from these 11 countres have dfferent preferences because of dfferences n cultures, tastes, natonal orgn, language habts, level of acculturaton, and other dfferences that affect ther food choces (Lowe 1991; Taylor and Stern 1997; Kaufman-Scarborough 2000; Sechena et al. 2003; Govndasamy et al. 2006). Kaufman-Scarborough (2000), for example, ponted out dfferences among Asan-Amercan sub-groups and the mportance of segmentng them n market analyss. However, the author also ponted out smlartes and suggested that groupng Asan-Amercans nto one consumer segment could be useful for some aspects of consumer behavor, as most Asan-Amercans prefer shoppng at ethnc markets, orental food, and specalty stores. Yeh et al. (1998) also suggested that Asans could be grouped as one consumer segment because many have lved n the US for numerous years and have blended ther habts wth people from the US and other cultures. Sensory studes have reported no sgnfcant dfferences n cross-cultural responses to tastes wthn foods common to dfferent cultures (Prescott 1998; Murray, Easton, and Best 2001). Respondents were ntercepted at Asan stores where lve seafood s sold, a common food product purchased by Asans (Degner et al. 1994; Myers et al. 2010; Pudur et al. 2010). Therefore, cross-cultural preferences among them may not be dfferent. Consequently, respondents from the 11 ndvdual Asan countres were not ncluded as separate consumer sub-groups by country, but were grouped as one consumer segment Asan. Nonetheless, the use of the RPOP model allows the testng of a possble latent heterogenety n preferences for lve seafood among the group. The probablty of shoppers expendtures on lve fsh/shellfsh fallng nto any of the expendture categores was specfed as: Prob (expendture ) = F (Freshwater fnfsh, Saltwater fnfsh, Shellfsh, Quantty purchased, Dstance travelled, Weekly purchase, Bweekly purchase, Monthly purchase, Qualty assurance, Freshness, Tradton, Prce s mportant, Sze s mportant, Asan, Amercan, Household sze, Income1, Income2, Income3 ). 1 A negatve coeffcent on an explanatory varable ndcates a hgher probablty of ts effect on shoppers expendtures beng n the lower expendture categores. However, a postve coeffcent ndcates a hgher probablty of the effect of the varable on shoppers expendtures beng n the upper expendture categores. Thus, a postve coeffcent suggests a hgher expendture or demand for lve fsh/shellfsh. To examne the mportance of specfc groups of factors n the model, a lkelhood rato (LR) test s used to compare models wth restrctons on seafood type (freshwater fnfsh, saltwater fnfsh, and shellfsh), ratonale for purchasng lve fsh (qualty assurance, freshness, and tradton), fsh attrbutes (prce s mportant and sze s mportant), and natve regon (Asan and Amercan). If the LR-test statstc 2 [LL (unrestrcted) LL (restrcted)] s greater than the crtcal χ 2 value, the null hypothess that a restrcton s supported s rejected, mplyng that the group of factors jontly has sgnfcant nfluence 1 The ncome varables are assumed to be observed wthout error and are ncluded to assess the varablty of preferences and the true expendture patterns of shoppers.

9 Lve Seafood Demand n the North Central Regon 67 on lve fsh/shellfsh expendtures. However, f the null hypothess s not rejected, then that group of factors jontly has no sgnfcant nfluence on lve fsh/shellfsh expendtures. Results The emprcal analyss proceeded by frst estmatng an RPOP model wth all the varables outlned above. Then separate RPOP models that restrcted seafood type (freshwater fnfsh, saltwater fnfsh, and shellfsh), ratonale for purchasng lve fsh (qualty assurance, freshness, and tradton), fsh attrbutes (prce s mportant and sze s mportant), and natve regon (Asan and Amercan) were estmated. The LR-test statstc value from excludng the seafood type varables was wth a crtcal value of Smlarly, the LR-test from excludng the ethnc regon resulted n a test statstc of wth a crtcal value of Ths suggests the mportance of these categores of factors on lve fsh expendtures. Table 2 presents the estmated mean coeffcents, standard devatons of the mean parameters, and margnal effects for the full RPOP model. The estmated mean coeffcents and correspondng standard devatons are reported n columns 2 and 3, respectvely, whle the margnal effects are reported n columns 4 to 7. The dependent varable s categorcally ordered so that the effects (postve or negatve) on the mddle expendture categores are vague (Greene 2007). The coeffcents of the RPOP model ndcate only the drecton of expendtures,.e., whether the varables generally ncrease (postve coeffcent) or decrease (negatve coeffcent) the expendtures on lve fsh/shellfsh. The margnal effects, however, descrbe how the probablty of beng n each expendture category changes for a one unt change n a partcular varable, or for a dscrete jump n a dummy varable. The monthly quantty of fsh purchased and dstance travelled both had postve coeffcents that were statstcally sgnfcant at the 1% level. Ths suggests that the more lve fsh/shellfsh purchased, the more lkely expendtures on lve fsh/shellfsh would ncrease, a result that should be expected, assumng fxed prces. Also, the further a shopper travelled to purchase lve fsh/shellfsh, the more they spent on lve fsh, whch may also be expected. Ths result can be clearly seen n columns 4 to 7 of table 2, where the margnal effects are reported. The effects of quantty and dstance sgnfcantly ncreased (decreased) the probablty of shoppers expendtures fallng nto the hgher (lower) categores, though the extent of the probabltes s very low compared to other estmated margnal effects. For the seafood type varables, purchase of saltwater fnfsh and shellfsh resulted n ncreased expendtures on lve seafood, as the estmated coeffcents had sgnfcant postve effects. Saltwater seafood and shellfsh are relatvely more expensve than freshwater fnfsh, so the results were expected. The margnal effects suggest that, wth the purchase of saltwater fsh, the probablty of shoppers ncurrng expendture wthn $21 $30 per vst would ncrease by about 10%, whle the probablty of shoppers ncurrng expendtures above $30 per vst would ncrease by about 1%. If shellfsh was purchased, the probablty of shoppers ncurrng expendture wthn $21 $30 per vst would ncrease by about 14%, whle the probablty of shoppers ncurrng expendtures above $30 per vst would ncrease by about 1%. On the other hand, the probablty of shoppers ncurrng expendture up to $10 per vst would reduce by about 5% f saltwater fsh was purchased and by 9% f shoppers purchased shellfsh. Other varables that resulted n ncreased probablty of shoppers ncurrng hgher expendtures on lve fsh/shellfsh per vst to a store were bweekly purchase, qualty assurance, and household ncome above $150,000 (Income3). If qualty assurance s the ratonale for purchasng lve seafood, the probablty of expendtures wthn $21 $30 per vst would ncrease by as much as 16%, whle havng household ncome above $150,000 (Income3) would ncrease the probablty of $21 $30 expendture per vst by as much as 24%.

10 68 Quagrane, Xng, and Hughes Table 2 Estmated Parameters of the Random Parameters Ordered Probt Mean Parameter Std. Dev. Up to $10 a $11 $20 a $21 $30 a > $30 a Monthly quantty *** *** *** *** *** Dstance travelled *** *** *** * *** *** Seafood Type Freshwater fnfsh Saltwater fnfsh *** * *** ** ** Shellfsh *** *** *** * *** *** Purchase Frequency Weekly *** Bweekly ** *** ** * Monthly Ratonale Qualty Assurance *** *** ** *** *** Freshness * Tradton ** Attrbutes Prce s mportant *** Sze s mportant Natve Regon Asan *** *** * *** *** Amercan *** *** ** *** *** Socoeconomc Factors Household sze Income Income Income *** *** * ** a Parameters are the margnal effects. *** ndcates sgnfcant at the 1% level; ** 5% level; and * 10% level. Beng an Asan or Amercan had statstcally sgnfcant negatve effects;.e., decreased the lkelhood of shoppers expendtures fallng n the hgher categores. Specfcally, the margnal effects suggest that the probablty of an Asan ncurrng lve seafood expendtures wthn $21 $30 per vst would decrease by about 25%, but the probablty of expendtures of up to $30 per vst would ncrease by about 16%. Smlarly, the probablty of an Amercan ncurrng expendtures of $21 $30 per vst would decrease by about 13%, but the probablty of expendtures of up to $30 per vst would ncrease about 11%. From the precedng results, factors that would ncrease the probablty of expendtures on lve fsh/shellfsh beng n the hgher category by at least 10% were the purchase of saltwater fsh, purchase of shellfsh, qualty assurance, and hgh ncome. Fsh farmers n the North Central Regon produce mostly freshwater fnfsh, so t s mportant to examne the effects of the varables on shoppers expendtures assocated wth seafood type. Consequently, the RPOP model was estmated for data assocated wth each seafood type. Tables 3, 4, and 5 present the estmated coeffcents and margnal effects, respectvely, for the freshwater fnfsh RPOP model, saltwater fnfsh RPOP model, and shellfsh RPOP model.

11 Lve Seafood Demand n the North Central Regon 69 All three seafood type models showed statstcal sgnfcant coeffcents for quantty purchased, qualty assurance, and hgh ncome earners, suggestng that these factors are mportant when t comes to lve seafood expendtures. For an addtonal pound of seafood purchased, the probablty of expendtures wthn $21 $30 per vst would ncrease by just about 1% dependng upon whether the seafood type s freshwater fnfsh (table 3), saltwater fnfsh (table 4), or shellfsh (table 5). However, when qualty assurance s consdered, the probablty of expendtures wthn $21 $30 per vst would ncrease by about 19% for freshwater fnfsh (table 3), 14% for saltwater fnfsh (table 4), and 20% for shellfsh (table 5). For hgher ncome earners (Income3), the probablty of freshwater fnfsh expendtures wthn $21 $30 per vst ncreased by 18% (table 3), saltwater fnfsh by 29% (table 4), and shellfsh by 31% (table 5). Ths result supports the orgnal result reported n table 2, whch shows that the hghest probablty of larger lve seafood expendtures s assocated wth hgh ncome earners, followed by qualty assurance. Dstance travelled s mportant regardng hgher lve seafood expendtures for freshwater fnfsh and shellfsh. Dstance travelled by shoppers was not an mportant factor n the saltwater fnfsh model. Regardng fsh attrbutes, the varable prce s mportant s statstcally sgnfcant n both the freshwater and saltwater fnfsh models but wth opposng effects. If consumers consdered prce as mportant, ther expendtures on saltwater fnfsh ncreased, but ther expendtures on freshwater fnfsh decreased. There s a 16% probablty of an ncrease n expendtures of $21 $30 on saltwater fnfsh per vst f shoppers consdered prce as mportant, compared to 4% probablty of ncrease n expendtures of up to $10 on freshwater fnfsh per vst. The estmated standard devatons assocated wth the parameter means dentfed sgnfcant heterogenety n atttudes among shoppers n some factors. In the orgnal RPOP model (table 2), statstcally sgnfcant standard devatons are assocated wth the mean parameters of quantty purchased, dstance travelled, shellfsh, weekly purchases, bweekly purchases, tradton, prce s consdered mportant, and among Amercans. Of partcular note are the standard devatons of the mean parameters for the frequency of purchase categores. The relatvely hgh values and the sgnfcant standard devatons of weekly purchases and bweekly purchases, but a low value and nsgnfcant standard devaton of monthly purchases, ndcate a hgh degree of varaton among shoppers regardng how often they purchase lve seafood. The results suggest that shoppers appear to have preferences for more frequent purchases of lve seafood, rather than less, wth much varablty among weekly and bweekly shoppers. Smlarly, the standard devaton of the mean parameter for Amercan suggests a large degree of varablty around the utlty level of lve seafood purchase for Amercans. However, the statstcally nsgnfcant standard devaton on the Asan mean parameter suggests that there s generally homogenety among Asans when t comes to lve seafood purchase. The results from table 2 ndcate heterogenety among shellfsh shoppers, whle shoppers of freshwater fnfsh and saltwater fnfsh were largely homogenous. For a better comparson among shoppers of the three seafood types, heterogenety s examned usng the estmated standard devatons of the mean parameters reported n tables 3 5. The results consstently suggest that for each seafood type, shoppers are heterogeneous n atttudes relatng to quantty of fsh purchased and household sze. Varaton among shoppers regardng monthly purchases s consstent wth the fndngs n table 2, but varaton among shoppers relatng to household sze s not. There s also some consstency among shoppers regardng heterogenety n atttudes of shoppers of freshwater fnfsh wth the orgnal results reported n table 2. It could be because 84% of shoppers ndcated purchasng freshwater fnfsh. Statstcally sgnfcant standard devatons assocated wth the mean parameters of quantty purchased, dstance travelled, bweekly purchases, tradton, prce s consdered mportant, household sze, and among Amercans, are largely smlar to those reported n table 2. In the saltwater

12 70 Quagrane, Xng, and Hughes fnfsh model (table 4), statstcally sgnfcant standard devatons are assocated wth the mean parameters of quantty purchased, dstance travelled, bweekly purchases, freshness, household sze, and among Amercans. In the shellfsh model (table 5), statstcally sgnfcant standard devatons are assocated wth the mean parameters of quantty purchased, weekly purchases, freshness, and household sze. Table 3 Estmated Parameters of Freshwater Fnfsh Mean Parameter Std. Dev. Up to $10 a $11 $20 a $21 $30 a > $30 a Monthly quantty *** *** *** *** ** Dstance travelled *** *** *** *** *** Weekly ** * ** ** Bweekly ** * Monthly Qualty assurance *** *** ** *** ** Freshness Tradton ** Prce s mportant * *** * Sze s mportant Asan *** *** *** *** Amercan *** *** *** *** *** Household sze *** Income Income Income ** *** * a Parameters are the margnal effects. *** ndcates sgnfcant at the 1% level; ** 5% level; and * 10% level. Table 4 Estmated Parameters of Saltwater Fnfsh Mean Parameter Std. Dev. Up to $10 a $11 $20 a $21 $30 a > $30a Monthly quantty *** * *** ** ** Dstance travelled *** Weekly Bweekly *** Monthly * Qualty assurance ** *** * Freshness ** Tradton ** * *** *** Prce s mportant ** ** ** Sze s mportant Asan *** * ** *** *** Amercan *** Household sze ** Income Income Income ** *** ** a Parameters are the margnal effects. *** ndcates sgnfcant at the 1% level; ** 5% level; and * 10% level.

13 Lve Seafood Demand n the North Central Regon 71 Table 5 Estmated Parameters of Shellfsh Mean Parameter Std. Dev. Up to $10 a $11 $20 a $21 $30 a > $30 a Monthly quantty *** *** *** *** ** Dstance travelled *** ** ** ** Weekly * *** * ** Bweekly * ** Monthly Qualty assurance *** *** * ** Freshness *** Tradton Prce s mportant Sze s mportant Asan *** ** *** ** Amercan * ** ** Household sze ** Income Income Income *** *** * ** a Parameters are the margnal effects. *** ndcates sgnfcant at the 1% level; ** 5% level; and * 10% level. Dscusson Shoppers of lve seafood showed dfferent atttudes regardng expendture patterns on lve seafood. Factors that would lkely ensure hgher expendtures on lve fsh/shellfsh were found to be the purchase of saltwater fnfsh, purchase of shellfsh, qualty assurance, and hgh ncome earners. These factors ncrease the probablty of expendtures n the hgher category by at least 10%. It makes economc sense to fnd that saltwater fnfsh and shellfsh, whch are generally more expensve than freshwater fnfsh, would show postve effects on the hgher expendture categores. The North Central Regon has no marne or saltwater resources, and these products need to be shpped over long dstances to the ethnc stores. The fndng that hgh ncome earners spend more on lve seafood reflects the effects of purchasng power and s n lne wth the Engel curve. Hgh ncome earners can afford more expensve seafood, so ther food spendng habts tend to ncrease wth the purchase of shellfsh, rather than saltwater fnfsh, and freshwater fnfsh. Saltwater fnfsh, shellfsh, and purchasng power, though mportant, are factors that fsh farmers n the North Central Regon have no ablty to manage or control. The manageable factor that was found to be hghly sgnfcant s qualty assurance. For freshwater fnfsh, a shopper has a 19% probablty of spendng $21 $30 per vst and a 2% probablty of spendng over $30. Ths compares well wth a 14% probablty of spendng $21 $30 per vst on saltwater fnfsh and 20% probablty on shellfsh. As Dochtermann (1996) ponted out, fsh destned for the lve market requres that qualty be mantaned throughout the growng perod. Ensurng fsh qualty through the value chan demands that farmers provde balanced and nutrtous dets, prevent or mnmze dsease occurrence, mantan proper stockng denstes, and handle fsh approprately durng producton and transportaton to the market. Healthy-lookng fsh reflects ts qualty and attracts hgher premums (Pudur et al. 2010; Myers et al. 2010).

14 72 Quagrane, Xng, and Hughes Regardng fsh attrbutes, shoppers who consdered prce s mportant n ther purchase decsons had a hgher lkelhood of spendng more on saltwater fnfsh compared to freshwater fnfsh. The effect of the prce s mportant varable does not clearly ndcate the prce effects on lve fnfsh/shellfsh purchases. However, the expendtures (dependent varable) are ordered outcomes, whch represent a censorng of an underlyng contnuously measured preference for lve seafood. A negatve coeffcent on the varable ndcates a lower effect on shoppers utlty. Thus, shoppers tend to demand less freshwater fnfsh and more saltwater fnfsh as they consder the ncreasng mportance of prce. Generally, shoppng frequency appears to be an mportant determnant of lve seafood expendtures. Shopper atttudes showed a hgh degree of varaton, partcularly wth respect to weekly purchases and bweekly purchases, whch suggest sgnfcant varablty around the utlty levels wth some shoppers preferrng more frequent purchases of lve seafood. The nsgnfcant parameter on the standard devaton of monthly purchases ndcates that shoppers gan postve utlty at that frequency of shoppng. Beng an Amercan does have a sgnfcant effect, and there s a large degree of varablty among ths group of shoppers. The heterogenety of Amercans could be a reflecton of the dversty among shoppers who consdered themselves Amercans, many of whom were non-caucasan but naturalzed or born and rased n the US. Those who dentfed themselves as Asan were found to be generally homogeneous n ther preferences for lve fsh, except saltwater fnfsh. Lve seafood s a common food product purchased by natves of Asan countres, suggestng that there mght not be much dfference n cross-cultural preferences for lve seafood, partcularly freshwater fnfsh, whch s common to the varous cultures. Murray, Easton, and Best (2001), for example, found no sgnfcant dfferences n preference between European-orgn and Chneseorgn consumers for a novel snack product common to both cultures. In a study of fsh consumpton n Bangladesh, Chna, Inda, Indonesa, the Phlppnes, Thaland, and Vetnam, Dey et al. (2005) reported that although preferences for freshwater and marne fsh speces vared by geographcal locaton, freshwater speces were mostly preferred by consumers n all the seven Asan countres studed. Our fndng appears to support the observaton that the preferences of consumers from dverse cultures tend to be homogeneous for foods common to ther cultures. Conclusons Shoppers of lve seafood showed a greater preference for shellfsh and saltwater fsh compared to freshwater fnfsh. Other factors that would lkely ensure hgher expendtures on lve fsh/shellfsh were found to be qualty assurance and hgh ncome earners. Fsh farmers n the North Central Regon generally produce freshwater fnfsh, and can compete n the lve seafood market wth ts dverse speces and product attrbutes by focusng on producng qualty freshwater fsh. Shoppers also appear to have preferences for more frequent purchases of lve seafood, suggestng the mportance of avalablty. Fsh farmers n the North Central Regon should ensure that there s year-round supply of freshwater seafood to ethnc stores to meet demand. References Allshouse, J., J. Buzby, D. Harvey, and D. Zorn Seafood Safety and Trade: Issues n Det, Safety, and Health. Agrculture Informaton Bulletn, no.789 7, USDA, Economc Research Servce.

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