Abstract
This article reports results from a framed market experiment conducted to examine whether milk choices are responsive to changes in the nutritional characteristics of milk products. Using a random-effect Tobit model, we analyzed experimental data collected from 160 participants in urban Ethiopia. It shows that sensory properties play a key role in the acceptance of reduced-fat milk while the provision of nutrition information has a mixed effect on a price premium. Further, a substantial percentage of participants were found to have a strong preference for whole milk while only 19% of them prefer reduced-fat milk with 2.8% price premium. The study unveils a heterogeneous preference for the nutritional quality of milk products. Consumers’ health problems and socio-demographic characteristics influence their preference for the nutritional quality of milk products. The result also shows a nutrition-taste tradeoff, yet consumers place more value on sensory experience. Contrary to earlier studies, we found that prior belief about milk quality influences how consumers value sensory experience and nutrition information.
