Developing marketing strategies for Jiloca saffron: a price hedonic model

Abstract

The paper examines the retail price structure of saffron currently marketed in the Spanish market, with special emphasis on the assessment of the region of origin and its certification as tools of differentiation. The motivation lies on the search for effective marketing tools for Jiloca saffron (Aragón) that in turn may contribute to preserve this traditional agricultural sector threatened by progressive abandonment. An hedonic price regression is estimated for this purpose, where the functional form is empirically determined. The prices and product characteristics have been collected from labels of saffron references either found on the shelves of representative retail shops in the main city of Aragon (Zaragoza) or on the internet shopping services that the main Spanish distribution chains offer. Results show that higher prices are attached for saffron distributed at supermarkets and Gourmet shops, marketed in threads, packaged in glass, and which carries a brand owned by a processor specialized in the processing and marketing of saffron. Currently, the recognition of Jiloca origin does not carry a premium, contrary to what happens to La Mancha, whilst the Protected Designation of Origin reinforces the economic value of La Mancha origin.