"The higher price of the local dish was an indicator of higher value," said Sharma. "So, customers were comfortable with a slightly higher price for the local food."
Sharma said the research could help restaurant owners decide how to set prices for local foods and estimate whether the potential to charge higher prices will compensate for the additional costs associated with adding local food to the menu.
"The study helps restaurants make decisions on whether it makes sense to offer local foods," said Sharma. "If local foods are a natural fit for some of these restaurants, then it would definitely be a good strategy to price the food higher because there is an indication of value with fresh food."
Sharma said another important finding of the research was that customers indicated they had no preference between restaurants that offered local foods and ones that did not.
The study of 322 customers was conducted at a training restaurant on a Midwest university that serves between 45 and 85 customers each day.
Researchers designed a real-time choice experiment to meet several challenges they anticipated from conducting an in-restaurant experiment. Customers who dine at a restaurant are less inclined to fill out long questionnaires. To avoid bias, the researchers asked questions only after the customers chose their food.
"We literally put the customers in the situation and let them choose," said Sharma. "Then we asked them why they made the choices they did."
|Contact: Matt Swayne|