The Impacts of Home Bias and Social Consciousness on Consumer Preferences for Domestically Produced Vanilla Extract

ABSTRACT Vanilla beans are the second most valued spice and are mostly grown in developing countries. The United States is the largest importer of vanilla beans, even though Florida's tropical climate is suitable for vanilla production. To examine consumer preferences and valuations for vanilla with different flavor sources and attributes, including domestic production, we conduct a nationwide choice experiment survey of US consumers. Respondents were randomly assigned to one of three information treatments or a control group receiving no information to determine the effect of additional information on consumer preferences for vanilla. Mixed logit model results indicate that survey respondents are willing to pay the highest premium for vanilla extracts made with US vanilla beans. This premium persists even when panelists are provided with information about the benefits of purchasing Madagascan vanilla to Madagascan farmers and economy. Our results suggest that home bias—a preference for domestic goods—plays a vital role in shaping how consumers value and support domestic producers through their purchasing decisions. Respondents in the control and all three treatment groups are also willing to pay significant premiums for naturally produced, organically produced, and non‐GMO attributes.