A Structural Econometric Model of Consumer Demand at Pick-Your-Own Fruit Operations

Abstract

This paper develops a fully structural econometric consumer demand model for goods which have time and monetary costs, and where time spent obtaining the goods also enters into the utility function. The model is used to analyze customers' decision to buy pick-your-own versus pre-harvested fruit at North Carolina pick-your-own fruit operations. The empirical application distinguishes the double effect of time as a resource constraint and also providing utility. Elasticity estimates show that strawberries sold at pick-your-own operations are price elastic, with pick-your-own fruit being less price elastic than pre-harvested fruit.Consumer/Household Economics,