Consumer choice and preference heterogeneity for liquid milk attributes in Sri Lanka: evidence from a choice experiment.

The majority of Sri Lankans rely on powdered milk over fresh liquid milk, despite liquid milk having a higher nutritional value than powdered milk. Also, the consumption of processed liquid milk remains low even among those who consume fresh milk. Therefore, understanding the key attributes that influence consumer choices is essential for developing effective policies and marketing strategies to promote the consumption of fresh liquid milk in Sri Lanka. This study uses a choice experiment approach to elicit consumer preference for liquid milk attributes from 410 consumers in the Northern Province of Sri Lanka. We used a random parameter logit model since consumers' preferences are heterogeneous. This study focuses on five attributes of liquid milk-milk fat, processing technology, food safety measures, packaging, and price. The findings of this study reveal that respondents prefer low-fat milk, pasteurization and UHT processing technologies, enhanced food safety measures, and reusable packaging. The willingness to pay (WTP) estimates indicated that respondents were willing to pay an additional LKR 170.72 for low-fat milk compared with whole milk, LKR 99.13 for UHT-processed milk, and LKR 55.42 for pasteurized milk compared with milk without processing. Further, the results revealed that preferences for milk attributes are heterogeneous, indicating that respondents with different sociodemographic characteristics prefer different levels of attributes. The findings of this study will enable policymakers, marketers, and milk processing companies to understand the consumer preferences for liquid milk attributes, while providing information to develop products with varying attribute levels to meet consumers' expectations and enhance competitiveness.