Hedonic price analysis of shrimp : quality factors influencing market price of shrimp in Nha Trang, Vietnam

Abstract

Purpose: The primary purpose of this study was to identify the various quality attributes of shrimp which influence on market price and evaluate the relationship between price and quality attributes. Secondly to point out the main quality characters of shrimp which influence consumer preference and demand in domestic market.

Theoretical framework – Based on Rosen (1974) proposed framework, simple linear form of hedonic price model of price dependent variable and combined continuous and dummy explanatory variables was developed to achieve the objectives.

Methodology and sampling - Seventy six shrimp observations were collected from a specific domestic market in Nha Trang and price and quality attributes were recorded. Variables used to estimate the model were adopted from previous literatures of seafood hedonic pricing. Hedonic model price was estimated by regressing price on quality attributes using OLS method in Shazam 10.0. A questionnaire survey was conducted using a convenience sample of 130 consumers in Nha Trang, Vietnam and data were analyzed using statistical tool Microsoft Excel 2003. Findings – The results confirm the hypothesis that the market price remarkably influenced by the extrinsic quality attributes of shrimp including carapace length, weight, origin, species freshness, product form and preservation method. Longer carapace length and no discolored shrimp are highly valued. Freezing, although widely practiced, receives the discount among preservation method. Fully cleaned to product form obtains a high premium. Furthermore, study found that some of quality characteristics such freshness, origin, species and size are also considered by consumer beside price which are the attributes influence on the consumer preference and demand. Even though, favourite quality attributes of shrimp vary with consumer, the most of consumers prefer the medium sized, sea-caught and fresh whole shrimp for consumption.