Market Segmentation via Mixed Logit: Extra-Virgin Olive Oil in Urban Italy

The paper presents some results from a stated-preference study that compares three samples of urban consumers of extra-virgin olive oil from three representative Italian cities: Naples (South), Rome (Centre) and Milan (North). A series of multinomial logit models are estimated from choice experiments responses and tested for unobserved heterogeneity for EU labelling informing on Protected Denomination of Origin and Protected Geographic Indication, organic production methods and place of origin attributes. The consequences of such form of heterogeneity are flashed out with respect to issues of market segmentation on the basis of the pattern of correlation across preferences as estimated from mixed logit models. Results indicate that product origin matters differently in different cities, while the sample from Naples is the least heterogeneous the Milan and Rome samples display highest taste heterogeneity, but also stronger intensity of taste.