The Welfare Value of Freshness: A Hedonic Price Analysis in the Retail Seafood Market in Japan

Freshness is one of the most important qualities of food products. However, quantifying the welfare value of freshness is challenging because reliable measures of freshness are rarely available for researchers. We overcome this challenge by using a newly developed device that generates objective and continuous measures of freshness via bioimpedance analysis. We sample whole horse mackerel and sardines at randomly selected retail stores in Tokyo, Japan, and examine the consumers' marginal willingness to pay for freshness in the hedonic price framework. By using spatial fixed-effects estimation, we find that the marginal willingness to pay is both statistically and economically significant for horse mackerel, with a one standard deviation increase in freshness leading to a 10.75% increase in price. In contrast, there is no statistically or economically significant freshness premium for sardines. These results are consistent with the dietary habits in Japan; horse mackerel are often eaten raw, while sardines are often eaten cooked.