Do Consumers Pay More for What They Value More? The Case of Local Milk-based Dairy Products in Senegal

Senegalese consumers prefer milk-based dairy products that are local and fresh to ones produced with imported powder. However, prices for fresh-milk-based and powder-based products are not significantly different. I address this puzzle by first confirming the preference using choice-based conjoint data to evaluate whether Senegalese consumers will pay a significant positive premium for fresh local products. I then identify price determinants using a unique dataset of milk product characteristics. The results verify the Senegalese preference for fresh local dairy products and show that consumers’ misinformation regarding product composition prevents them from allocating a higher price to local milk-based products.