Impact of Embodied Characteristics and Sensory Variables on the Price of Milk at Retail Level

Waseem Ahmad, Tanvir Ahmed and Ghulam Shabbir

Abstract

The study is concerned with the valuation of various components of milk at retail level. To understand this relationship, cross sectional data at retail level are obtained and Hedonic model is applied to value different components of milk (fat, solid-not-fat, water, total plate count). The study further uses sensory variables (color, aroma, taste and freshness) to determine their impact on the price of milk. Results of the study show that fat and solid- not- fat contents have positive impact on price of milk, which means consumers pay premium price for milk having higher fat and solid- not- fat contents. Further the study shows that consumers pay premium price to milk having desirable color, aroma, taste and freshness.