Is local all that matters?: An experiment on Canadian consumers’ preferences for produce

Abstract

Controlled environment agriculture is important in regions where traditional farming is constrained by short growing seasons. Of particular relevance, vertical farming is an innovative agricultural technology that enables year‐round production in Canada. However, Canadian consumers’ preferences for vertically farmed products remain a knowledge gap. This study investigates how nudges and local food labelling change market outcomes for identical food produced using different production methods. In a pre‐registered field experiment, 610 Canadian consumers bid on vertically farmed, greenhouse grown, and field grown lettuce, each further differentiated by local and non‐local labels, using the Becker‐DeGroot‐Marschak (BDM) mechanism. Nudges highlighting the benefits of vertical farming were randomized between‐subject at the individual level. Results show that consumers are willing to pay a significant premium for local lettuce, regardless of the production method. Although consumers respond positively to nudges, local labelling is by far the largest contributor to willingness‐to‐pay premium. This study underscores the importance of advancing innovative food production technologies to enhance the availability of locally grown food year‐round.