Effects of Product Attributes and Consumer

Characteristics on Attitude and Behavior:

The Case of Peanuts in a Transition Economy
Wanki Moon and Wojciech J. Florkowski
Department of Agricultural & Applied Economics,
The University of Georgia, Georgia Station, Griffin, GA 30223
Larry R. Beuchat, Anna V. A. Resurreccion, and Manjeet S. Chinnan
Center for Food Safety and Quality Enhancement,
The University of Georgia, Georgia Station, Griffin, GA 30223
Pavlina Paraskova and Jordan Jordanov
Canning Research Institute, 154 Vassil Aprilov Blvd.,
Plovdiv 4000, Bulgaria
ABSTRACT
Using consumer survey data collected in Bulgaria in 1997, this study examined consumer preferences
for peanuts in a transition economy. Perceived product attributes and household characteristics were
hypothesized to influence attitude and peanut consumption behavior. The effects of perceived prod-
uct attributes on overall attitude toward peanuts were examined, drawing on Fishbeins multiattribute
model. Consumption behavior was analyzed using a count data model that distinguishes between par-
ticipation and consumption frequency decisions. Results showed that perceived attributes with respect
to taste and price consistently influenced consumers overall attitude toward peanuts and consump-
tion behavior. Income and location of households were statistically significant in explaining peanut
consumption frequency. Whereas perceived health attributes affected attitude toward peanuts, they
were not directly associated with consumption behavior. 1999 John Wiley & Sons, Inc.
1. INTRODUCTION
Several macroeconomic studies have reported the effect of economic reforms on aggregate
consumption and incomes in economies in transition (Fischer, Sahay, & Vegh, 1996; Her-
nandez-Cata, 1997; Selowsky & Martin, 1997). In Central and Eastern European (CEE)
countries, the initial effect included a sharp decline in real output. However, in those coun-
tries that consistently implemented market reforms, the economy stopped shrinking and
registered positive growth rates (Selowsky & Martin). Bulgaria recently joined this group
reporting that its economy is expected to grow at the rate of 5% in 1998.
Growing market-oriented economies create a need for disaggregated market and demand
studies. Results from such studies provide economic information essential for expansion of
the private sector or investment decisions. Between 1995 and 1997, nearly $181 million
411
Agribusiness, Vol. 15, No. 3, 411425 (1999)
1999 John Wiley & Sons, Inc. CCC 0742-4477/99/030411-15
was invested in Bulgarian food industries by foreign companies. Foreign companies
brought new production technologies but, more importantly, marketing expertise lacking
among domestic food companies. To effectively perform in an increasingly competitive
market, food manufacturers, distributors, and retailers need information about consumers
preferences for foods. Knowledge of consumer preferences for items other than basic foods
influences decisions of food companies about what to produce and market in economies in
transition.
Asnack market in Bulgaria includes imported and domestically manufactured products.
For example, brand name candy bars have been aggressively promoted by western compa-
nies. Traditional Bulgarian snacks include banitza (stuffed pastry), sunflower seeds, and
roasted peanuts. Versatility of snacks is associated with the manageable portion size of
ready-to-eat food that can be conveniently consumed in various settings. Moreover, food
consumption is more responsive to changes in income in low and middle income countries
than in high-income countries (Senauer, Asp, & Kinsey, 1992; Alvensleben, 1997). Conse-
quently, snack food market in transition economies could grow fast once the economy starts
to expand.
In Bulgaria, the popularity of peanuts as a snack is evidenced by their display at farm-
ers markets, in grocery shops, and on street stands where vendors offer raw, roasted, and
flavored peanuts and peanut products. Bulgarian candy manufacturers successfully market
chocolates containing roasted peanut paste. This preeminence of peanuts motivated a
peanut preference study. However, in the absence of large and reliable data sets, the study
required implementation of a consumer survey.
The purpose of this article is to assess consumer preferences for peanuts and peanut prod-
ucts using consumer survey data collected in Bulgaria. Specifically, we seek to distinguish
between factors affecting consumer attitude toward peanuts and reported peanut consump-
tion behavior. Besides researching the effect of demographic and socioeconomic character-
istics of respondents, we investigate the influence of various perceived attributes of peanuts
on consumer attitudes and consumption. Results generated from this study provide crucial
information for domestic and foreign food processing companies seeking investment or ex-
port opportunities. Identification and comparison of factors influencing attitudes and con-
sumption behavior are important in formulating short and long-term product marketing
strategies. Strategies based on knowledge of consumer needs and development of products
with attributes satisfying consumer demands improve chances for successful product mar-
keting in the emerging private sector and contribute to economic expansion of the country.
Knowledge of consumer preferences for peanuts and peanut products provides invalu-
able insights for Bulgarian farmers. Many operate small farms on recently returned land af-
ter the collapse of the collective farming system. Peanuts are a marketable crop, which can
be successfully grown on small farms. In southern Bulgaria, peanut growers are concen-
trated around the village of Sadova where the national peanut breeding program is located.
The program has been supplying farmers with seed of several cultivars developed from Bul-
garian breeding lines and suited for local growing conditions. Agrowing snack market pro-
vides an opportunity to stimulate economic activity beyond the distribution and manufac-
turing sectors.
2. ATTITUDINAL SURVEY RESULTS
Survey instruments used in this study were drafted by a multidisciplinary team of re-
searchers from the United States and Bulgaria. Following a pretest on a group of Bulgari-
412 MOON ET AL.
an consumers, questionnaires were distributed to 2,500 households across the country
by the Bulgarian National Statistical Service; 2,133 completed questionnaires were re-
turned. Survey instruments were distributed and collected in person by enumerators, thus
contributing to the high response rate. Respondents self-administered the questionnaire,
and described their general consumption habits and attitudes about peanuts, peanut prod-
ucts, and perceived product attributes along with socioeconomic and demographic infor-
mation.
A general question was posed to household panels: Do you like peanuts?. An over-
whelming majority, 86% of participants, answered affirmatively. Furthermore, 83% of
those respondents stated, in answer to another question, that they would like to eat more
peanuts. Expressed opinions imply that the Bulgarian peanut market is far from being sat-
urated, offering potential for increased demand for peanuts and peanuts products.
Peanuts can be consumed in various forms. Hence, examining consumer attitude toward
peanut products was necessary to obtain more specific information about consumer prefer-
ences. A question, How do you like peanuts in the following forms?, probed for prefer-
ences of household panel members. Peanut products selected in this study included roast-
ed peanuts, chocolate covered peanuts, peanut tahina (a paste made of ground peanuts),
fried peanuts, peanut paste (similar to peanut butter), peanut kernels with sugar coating
(dragee), and boiled peanuts. Consumers selected responses from the six categories: Dis-
like very much, Dislike, Neither like nor dislike, Like, Like very much, and Dont eat.
Roasted peanuts were greatly preferred to other forms. About 84% of respondents chose
Like or Like very much. Next, chocolate covered peanuts were liked or liked very much by
55% of respondents. Peanut tahina, a unique Bulgarian product, was liked or liked very much
by 37% of respondents. Believed as a good source of energy, peanut tahina is eaten by some
people in the morning. However, peanut tahina is less preferred than tahina made of sesame
seeds but is also less expensive. Fried peanuts, peanut paste, and dragee containing peanuts
were preferred by fewer than one-forth of respondents. Boiled peanuts were unpopular, which
supports observations from an informal sensory evaluation panel, which clearly placed this
product at the bottom of 38 tested peanut products. While about 63% did not eat peanut paste
or dragee, only about 9% did not eat roasted peanut. Findings suggest that roasted peanuts
and peanuts in chocolate seem to have the greatest acceptance among Bulgarian consumers.
Roasted peanuts were identified as the most preferred product among Bulgarian con-
sumers. At issue, then, are the attributes of roasted peanuts contributing to such a favorable
attitude. The survey instrument presented a list of four statements about attributes of roast-
ed peanuts to household panel members. Each statement referred to a sensory, nutritional,
or economic attribute of roasted peanuts: (a) I like the taste (TASTE); (b) they are a source
of fat (FAT); (c) they are healthy (HEALTHY); and (d) they are inexpensive (INEXP). Con-
sumers were asked to express the extent to which they agreed with each statement using a
5-point Likert scale ranging from Strongly disagree to Strongly agree. The question also in-
cluded the sixth choice, Dont know.
The most attractive attribute of roasted peanuts, according to Bulgarian respondents, was
TASTE. About 82% of respondents agreed or strongly agreed that roasted peanuts tasted
good. In contrast, only about 8% agreed that roasted peanuts were inexpensive. Knowledge
about fat in peanuts was quite high, although one in five respondents admitted they could
select only the option, Dont know. About 44% of participants agreed that roasted peanuts
were healthy. Hence, while TASTE and PRICE were two prominent attributes of peanuts
that can potentially influence overall attitude toward roasted peanuts, a significant number
of respondents were uncertain about health and nutritional attributes of roasted peanuts.
THE CASE OF PEANUTS 413
3. CONCEPTUAL AND EMPIRICAL MODEL OF ATTITUDE
TOWARD ROASTED PEANUTS
Fishbeins multiattribute attitude model (attitude toward an object) offers a conceptual
framework for analyzing the linkage between overall attitude toward peanuts and perceived
peanut attributes (Fishbein, 1963; Fishbein & Ajzen, 1975). The multi-attribute model rep-
resents a valuable approach to examining the relationship between consumers product
knowledge and their attitude toward the product (Lutz & Bettman, 1977). Attitudes are an
expression of inner feelings that reflect whether a person is favorably predisposed to some
object (Mowen & Minor, 1998). While measuring attitudes helps marketers to understand
consumers overall evaluation for a product, it fails to provide specific insights as to what
influences or explains a consumers evaluative rating. The multi-attribute model views an
attitude object as possessing many attributes (characteristics) that establish the basis of con-
sumers attitude. Fishbeins model is written as,
Attitude
t

n
i1

it
z
it
i = 1,2,.....n (1)
where
it
is the importance weight or the goodness/badness of attribute (i) evaluated by
consumer (t) and z
it
is the strength of the belief of consumer (t) that the object has an at-
tribute (i); and n is the number of salient attributes.
1
The model thus proposes that attitude
toward an object is based on the summed set of beliefs about the objects attributes weight-
ed by the evaluation of these attributes. In marketing studies, both the evaluation (
it
) and
belief (z
it
) are obtained from survey responses, and used for calculation of the overall atti-
tude toward a product.
Survey data used in this study provide cross-sectional information on overall attitude to-
ward roasted peanuts and strength of the belief that roasted peanuts have such attributes as
TASTE, INEXP, HEALTHY, and FAT. Consequently, by modifying equation (1) into a sto-
chastic regression model, we can statistically measure the importance weight or evaluation
of the goodness or badness of attribute (i),
Attitude
t

4
i1

i
z
it
+
t
= Z
t
+
t
t = 1,2,.....T (2)
where subscript (t) denotes consumers; Z
t
is a vector of the four statements about peanut at-
tributes described in the previous section and now represents a vector of unknown re-
gression coefficients to be estimated. Magnitudes and signs of the estimated coefficients
would measure the importance and goodness or badness of each attribute, respectively, in
overall attitude toward roasted peanuts (Steenkamp, 1997). An ideal multi-attribute study
would have data on beliefs, importance weights and evaluations. The current approach of
estimating the parameter vector () statistically is preferable to collecting them directly
from consumers because respondents could have difficulty separating the importance from
an evaluation for low-involvement products like foods (Slovic & Lichtenstein, 1971; Wedel
& Steenkamp, 1991; Steenkamp, 1997).
Given the regression equation (2), an econometric model should be selected to properly
estimate the parameter vector (). Consumers expressed their attitudes toward roasted
peanuts using a 5-point scale, ranging from Dislike very much to Like very much. The mea-
414 MOON ET AL.
1
Definitions and measurement methods of the variables in multiattribute models may slightly vary across stud-
ies. Refer to Wilkie & Pessemier (1973) for a discussion of those issues.
surement scale allows the ranking of outcomes and requires the application of a multi-
ordered response model (Maddala, 1983). Hence, an ordered probit model was used to es-
timate the equation (2).
Let Y
t
*
be an unobserved underlying response variable of the five categories of attitude.
Then, the latent regression model is given by
Y
t
*
=

Z
t
+
t
(3)
where Z
t
is a vector of the four perceived attributes that are described in previous section
and hypothesized to influence overall attitude toward roasted peanuts; is a vector of pa-
rameters associated with the Z
t
and
t
is a vector of random error terms. While Y
t
*
is not ob-
served, the category (Y
t
) selected by respondents is known,
(4)
where the
1..4
are parameters to be estimated along with . With normally distributed er-
ror terms (
t
), the probability that a respondent would choose the jth category of attitude
scale is given by,
Prob(Y
t
= j ) = (
j

Z
t
) (
j1

Z
t
) j = 1,2,3,4,5 (5)
where denotes the standard normal cumulative distribution function. The corresponding
log- likelihood function is
(6)
Prior to estimation of the parameters and s,
1
is normalized to be 0. Otherwise, the
equations which include a constant term would be underidentified. The maximum likeli-
hood estimation gives consistent, asymptotically efficient and normal estimator. Cross-sec-
tional data typically suffer from heteroskedasticity (Green, 1997). Therefore, the following
heteroskedastic regime is specified for variance of the error terms,
Var[
t
] = [exp(

P
t
)]
2
(7)
where P
t
is a subset of explanatory variables causing heteroskedasticity and is a vector of
parameters associated with the subset.
In addition to the four perceived peanut attributes, socioeconomic and demographic char-
acteristics of respondents could affect various stages of consumer decision process includ-
ing formation of attitude toward a product (Steenkamp, 1997). For example, income may
ln ( , , ) ln[ ( ) ( )] L Y Z Z Z
t t j t
t
T
j
j t
=
= =


1 1
5
1
Y if Y
if Y
if Y
if Y
if Y
t t
t
t
t
t
=
= <
= <
= <
= <
1 0
2 0
3
4
5
1
1 2
2 3
3 4
*
,
*
*
*
*

THE CASE OF PEANUTS 415
be modeled as a factor influencing attitudes (preferences) as well as a restriction on behav-
ior (Alvensleben, 1997). Consequently, the vector Z
t
is expanded to include household in-
come, educational attainment level, age, gender, and geographic regions. While household
income can be hypothesized to have a positive relationship with peanut consumption in Bul-
garia, the role of household income in shaping consumer attitude toward roasted peanuts is
not clear. Thus, the effect of household income will be determined empirically.
Educational attainment levels influence on shopping preference and consumption be-
havior has been well recognized in empirical studies. The Bulgarian school system consists
of several types of schools where university and postgraduate degree represent the highest
educational attainment level. In this study, elementary and secondary schools are ordered
according to progression made by students, leading eventually to college education. Age
influences preferences. Market segmentation based on age is regularly pursued by corpo-
rations in market economies, but in transition economies age-related preference may be dif-
ferent. Age structure in Bulgaria suggests an increasing role of middle-aged and older con-
sumers. In a transition economy, these groups may find it difficult to cope with new
economic realities. The drastically altered welfare system assures in many cases only min-
imal pensions permitted by the need to balance the government budget. Preferences are of-
ten gender-specific; therefore, gender was included in statistical analysis.
The data were collected from 28 statistical districts in Bulgaria and aggregated into four
geographic regions: Southern, Metropolitan, Northern, and Coastal. The aggregation was
based on natural conditions and economic differences among regions. The Southern region
is used as a base and is omitted from the model to avoid singularity problem. Table 1 pro-
vides a detailed description of variables used in the empirical model estimation.
3.1 Results
An ordered probit model was estimated with and without consideration for heteroscedas-
ticity. Log-likelihood ratio (LR) was computed to test the null hypothesis of no het-
eroscedasticity. The calculated
2
statistic, 211.5, rejected the hypothesis of homoscedas-
ticity at 0.01. Table 2 shows parameter estimates and asymptotic t values from the
heteroscedasticity-corrected ordered probit model. The hypothesis that all coefficients in
the equation are simultaneously equal to zero was rejected by
2
test results.
Results from the ordered probit model demonstrate the importance of TASTE. Respon-
dents who agreed that roasted peanuts tasted good perceived roasted peanuts more favor-
ably than those who disagreed. The perceived price attribute of roasted peanuts (INEXP)
had a statistically significant and negative coefficient, indicating that respondents who per-
ceived roasted peanuts to be inexpensive were less likely to admit that they liked roasted
peanuts than those who did not share this view. Alternatively, the negative sign implies that
respondents who regarded roasted peanuts expensive had more favorable attitude toward
roasted peanuts than those who did not. It is plausible that consumers who face budgetary
constraints are likely to perceive roasted peanuts expensive, and possibly, to treat peanuts
as a desired product.
HEALTHY was found to be statistically significant and indicates that respondents who
agreed roasted peanuts are healthy were likely to have more favorable attitude toward roast-
ed peanuts. Interestingly, FAT was statistically significant and adversely influenced con-
sumer attitude toward roasted peanuts, indicating that consumers who believed that roast-
ed peanuts are a source of fat had an unfavorable attitude toward roasted peanuts.
416 MOON ET AL.
THE CASE OF PEANUTS 417
TABLE 1. Description and Summary Statistics of Variables Used in Empirical Model Estimation
Variable Statements and Measurement Units M
Perceived attributes of 1Strongly disagree; 2 Disagree; 3 Neither disagree nor
roasted peanuts agree; 4 Agree; 5 Strongly agree; and 6 Dont know
TASTE I liked the taste 4.12
FAT Roasted peanuts are a source of fat 3.28
HEALTHY Roasted peanuts are healthy 2.98
INEXP Roasted peanuts are inexpensive 1.86
Demographic and
socioeconomic profiles
Household income 1 10,000 or less; 2 10,00120,000; 1.68
(in leva) 3 20,00130,000; 4 30,00140,000;
5 40,00150,000; 6 50,001 or more
Educational attainment 1 4 years; 2 7 years; 3 Vocational; 5.84
level 4 High school; 5 Technical; 6 Junior;
7 University; 8 Postgraduate
Age Years 48.4
Gender 1 Female; 0 Male 0.63
Geographic regions
a
Northern 1 Northern; 0 Otherwise 0.23
Coastal 1 Coastal; 0 Otherwise 0.21
Metropolitan 1 Metropolitan; 0 Otherwise 0.27
a
Southern region was used as a base in model estimations.
Source: 1997 Bulgarian National Consumer Survey.
While consumer attitude toward roasted peanuts did not differ across demographic and
socioeconomic profiles of respondents, it varied across the four geographic regions. Con-
sumers residing in the Coastal and Northern regions had more favorable attitude toward
roasted peanuts than those in the Southern region. It is interesting to note that most peanuts
in Bulgaria are produced in the Southern region, but consumers residing in other regions
perceived peanuts more favorably than Southerners. Peanuts are not grown in northern Bul-
garia where agriculture is dominated by row crops such as corn, wheat, and sunflower raised
on large farms. Peanuts are produced as a cash crop on small plots in the southern part of
the country.
4. PEANUT CONSUMPTION BEHAVIOR
An examination of attitude toward roasted peanuts and their attributes provided consider-
able insights about consumer preferences in Bulgaria. In particular, ordered probit model
based on Fishbeins multiattribute concept identified product attributes and factors influ-
encing consumer attitude toward roasted peanuts. While the central purpose of measuring
attitude is to predict behavior, the strength of the attitudebehavior relationship has long
been questioned within consumer behavior and social psychology literatures (Ajzen &
Fishbein, 1977, 1980; Bagozzi, Baumgartner, & Yi, 1989; Zey & McIntosh, 1992). Conse-
quently, in this study, we estimate an equation representing peanut consumption behavior
and investigate if there is a difference in the factors affecting attitude and behavior. Then,
we can identify factors contributing to the discrepancies between attitude and actual be-
havior.
To reveal the actual consumption behavior, consumers participating in survey were asked
to report monthly consumption frequency of peanuts. Household peanut consumption fre-
quencies varied from 0 to 28 per month. Whereas some households did not consume peanuts
during the survey month, others consumed peanuts almost daily. Why do households differ
in their consumption of peanuts? Similarly, as in the attitude model, we hypothesize that
demographic and socioeconomic characteristics, including household income, educational
attainment level, age, gender, and location (region) and consumer attitudes toward four at-
tributes of roasted peanuts influence household consumption frequency.
4.1 Hurdle Count Data Model
Reported peanut consumption frequency is an integer value. Hence, count data models are
appropriate (Greene, 1997; Cameron & Trivedi, 1997). In addition, reported zero con-
sumption included in the data has a particular significance in cross-sectional demand analy-
sis: zero observations may indicate either corner solutions conditioned by economic vari-
ables or nonconsumers who qualitatively chose not to participate in the market. Traditional
tobit models treat zero values as true corner solutions. Craggs hurdle model allows zero
values to be both optimal continuous consumption decisions and discrete decisions not to
participate in the market (Cragg, 1971). The hurdle model explicitly incorporates partici-
pation decisions in an equation separate from consumption decisions. In this study, the count
data model with hurdle formulation suggested by Mullahy (1987) is used to model peanut
consumption frequency in Bulgaria.
418 MOON ET AL.
TABLE 2. ML Estimates of Ordered Probit Model for Consumer Attitude toward Roasted Peanuts
Variable Names
a
Parameter Estimates Asymptotic t values
Constant 1.2517*** 4.101
TASTE 0.5103*** 9.113
FAT 0.1649** 2.700
HEALTHY 0.1825*** 3.707
INEXP 0.0986** 2.533
Household income 0.0246 0.645
Educational attainment level 0.0066 0.314
Age 0.0032 1.098
Gender 0.1046 1.294
Coastal 0.1957* 1.658
Northern 0.2049* 1.976
Metropolitan 0.0029 0.028

1
0.4588 5.480

2
0.5934 6.191

3
1.3835 8.745

4
2.0352 9.622
Log-L values 999.6
Log-L values ( 0) 1185.3

2
statistics 374.0
McFaddens R
2
0.134
*p 0.1.
**p 0.05.
***p 0.01.
a
See Table 1 for variable definitions.
Geometric distribution is chosen over Poisson distribution to allow overdispersion in the
data (Mullahy, 1987; Lin & Milon, 1993). Following Mullahy, geometric distribution of
peanut consumption frequency (y
t
) is defined
(8)
Then, parameterizing = exp(Z
t
), the loglikelihood function for single-decision geomet-
ric distribution model can be written as
(9)
where Z
t
is a vector of explanatory variables including demographic and socioeconomic
characteristics and perceived attributes of peanuts. Assuming that the vector Z
t
influences
both participation and consumption decisions, Craggs hurdle formulation is represented by
the following general likelihood function
(10)
where
0
and
1
indicate multiplication over zero (0) and positive (1) observations;
1
,
2
and
2
denote cumulative distribution and density functions, respectively;
1
and
2
are
parameter vectors associated with participation and consumption equations, respectively.
The likelihood function suggests that a binomial probability model governs the binary out-
come of whether peanut consumption has a zero or a positive realization. If the realization
is positive, the hurdle is crossed, and the conditional distribution of the positive consump-
tion is governed by a truncated-at-zero count data model. Variables in the vector Z
t
are al-
lowed to have differential and even opposite direction of impacts on participation and con-
sumption decisions with the two parameter vectors
1
and
2
.
Given the decision rules represented by equation (10), an appropriate geometric hurdle
specification is given by
(11)
(12)
(13)
Parameterizing
1
(Z
t

1
) and
2
(Z
t

2
), binomial probabilities composed of equations
(11) and (12) are identically those of a standard binomial logit model. Equation (13) is in
Pr( ) / [( ) ],
,
( )
y y y
else
t t
y y
t
t t
e > = +
=

+
0 1
0
2
1
2

[ Pr( ) Pr( ) /( ), , . . . 1 0 1 1 2
1 1
= = = + =

+
+

y y
t t
y
t


Pr( ) /( ) y
t
= = + 0 1 1
1

L Z y Z Z
t t t
=

[ ( ) [ ( , ) ( ) / ( )] 1
1
0
1 2
1
2 1 1 2 2

Log L y Z y Z
t t t t
t
T
= + +
=

( ) log[ exp( )] 1 1
1
G y y
else
where E y and y
t
y y
t
t t
t t
( , ) ( ) , { , , . . .}
,
( ) var( ) ( )
( )


= + =
=
= = +
+
1 0 1 2
0
1
1

THE CASE OF PEANUTS 419

the form of a truncated-at-zero geometric model. The complete likelihood function for geo-
metric hurdle formulation based on equations (11) through (13) is
(14)
The likelihood function can be maximized jointly with respect to
1
and
2
, or by separate
estimations of
G1
and
G2
. If
1

2
, equation (14) reduces to equation (10), the likeli-
hood function for single decision formulation.
4.2 Results
Single-decision and hurdle geometric models represented by equations (10) and (14), re-
spectively, were estimated using the maximum likelihood method. Table 3 shows estimat-
ed parameters and corresponding asymptotic t values for each model. Usefulness of two-
stage decision models has been demonstrated in studies of other food products such as
shellfish, cheese, or butter (Gould, 1992; Lin & Milon, 1993; and Yen, 1993). In this study,
the hurdle model was tested against the single decision model using Vuongs likelihood ra-
tio based model selection procedure (Vuong, 1989). Vuongs statistic tests the null hypoth-
esis that two competing models are equally close to the true data generating process against
L Z
Z Z
y Z Z
Z Z
t
t t
t t
y
G
t
G
t
t
= +

{ / [ exp( )]}
* {exp( ) / [ exp( )]}
* exp[( ) ] / {[ exp( )] }
[ ] * [ ]
1 1
1
1 1
1
0
1 1
1
1
2 2
1
1
2
2

420 MOON ET AL.
TABLE 3. Geometric Hurdle and Single-Decision Models of Peanut Consumption in Bulgaria
Hurdle Geometric Model
Single-Decision
Variable Names Participation Consumption Model
Constant 0.0202(0.052) 0.3644(1.080) 0.6424(2.832)**
TASTE 0.5456(7.647)*** 0.2761(4.701)*** 0.4055(9.795)***
FAT 0.0908(1.377) 0.0290(0.691) 0.0197(0.568)
HEALTHY 0.0567(1.079) 0.0356(1.045) 0.0018(0.066)
INEXP 0.2139(5.201)*** 0.0990(3.376)*** 0.0082(0.342)
Household income 0.0673(1.169) 0.1701(4.577)*** 0.1001(3.249)***
Education 0.0781(2.409)** 0.0842(4.082)*** 0.0840(4.910)***
Age 0.0260(7.226)*** 0.0145(6.236)*** 0.0177(9.311)***
Gender 0.3193(2.653)** 0.0115(0.152) 0.0729(1.149)
Coastal region 0.1908(0.960) 0.1049(0.9204) 0.0796(0.816)
Northern region 0.9638(6.521)*** 0.4097(3.914)*** 0.5691(6.859)***
Metropolitan region 0.1700(1.117) 0.0897(0.983) 0.0165(0.214)
Log-L values 3247.3 3301.2
Log-L values ( 0) 3578.3 3586.5

2
statistics 662.12 570
McFaddens R
2
0.11 0.079
Vuongs statistic 4.48
*p 0.1. **p 0.05. ***p 0.01.
Note: numbers in parentheses are asymptotic t values.
the alternative hypothesis that one model is closer. Vuongs statistic follows a standard nor-
mal distribution under the null hypothesis. The calculated Vuongs statistic is 4.57, while
the critical value at a significance level p 0.01 is 2.34, decisively rejecting the null hy-
pothesis in favor of the hurdle model. Therefore, discussion of the results is focused on the
parameter estimates of hurdle model.
Areview of the results in Tables 2 and 3 reveals pronounced differences between the set
of variables found to significantly influence the attitude and that which affected the partic-
ipation or consumption decisions. According to the results, all of the four peanut attributes
and binary variables representing regions exclusively contributed to the explanation of at-
titude toward roasted peanuts. In contrast, only two attribute descriptors, regional, socio-
economic and demographic variables influenced the participation and consumption fre-
quency decisions. Although product attributes determine attitude, the decision to purchase
was less influenced by attributes and more by demographic characteristics and education-
al attainment level. Finally, the consumption frequency was influenced by household in-
come beside product attributes and respondent characteristics. Differences in the sets of sta-
tistically significant variables have important practical implications for marketing strategies
of food processing and distribution industries.
4.3 Participation Decision
The consumers decision to purchase peanut was influenced by TASTE and INEXP. These
variables were also significant in the roasted peanut attitude model. The stronger the re-
spondents agreement that roasted peanuts tasted good, the more likely he was to purchase
roasted peanuts. In contrast, consumers who agreed that roasted peanuts were inexpensive
were less likely to purchase roasted peanuts. This result is likely associated with the image
of peanuts among respondents expressing that specific opinion.
Four other significant variables likely to lower the probability of purchasing peanuts were
age, gender, education, and regional location. Older consumers were less likely to become
peanut consumers than younger consumers, while women could be expected to purchase
peanuts with lower probability than men. The higher level of educational attainment, the
less likely was the respondent to enter the roasted peanut market. Finally, northerners were
less likely to buy roasted peanuts than those in other regions of Bulgaria.
4.4 Consumption Frequency
Roasted peanut consumption frequency was influenced by similar factors as the decision to
purchase with a few notable exceptions. The hurdle model showed that household income
was statistically significant only in the equation explaining consumption intensity but not
the participation decision. This result suggests that income was a major factor constraining
the frequency of peanut consumption. Hence, a general increase in household income would
induce consumers to eat peanuts more frequently, but was not likely to attract new con-
sumers to purchase peanuts. The differential effect of household income on the two deci-
sions of whether to consume and how much to consume illustrated the importance of two-
stage decision modeling and provided insights that the single-decision model could not
offer.
The perceived price attribute of roasted peanuts (INEXP) had a statistically significant
and positive effect on roasted peanut consumption frequency, indicating that respondents
who considered roasted peanuts inexpensive tended to eat roasted peanuts more often. The
THE CASE OF PEANUTS 421
effect of INEXP in the attitude and purchase decision equations was negative, while being
positive in the consumption equation. Consumers possibly associated the price level with
quality. Then, the perception that roasted peanuts were expensive led to favorable attitude
and encouraged consumers to eat roasted peanuts at least once, increasing the purchase
probability, but limiting the consumption frequency because of budget constraint.
Consumers with more education were less likely to buy peanuts, but according to the re-
sults if they participated in the peanut market, they consumed peanuts more often than those
with less education. Women were found to be less likely to purchase peanuts, but no gen-
der differences were found in consumption frequency. Consequently, attracting a particular
gender or higher educated individual to peanut market may require revisions in marketing
approach.
Variables that significantly affected the consumption of peanuts as they did the purchas-
ing decision, were TASTE, age, and the location of respondents residence. All three vari-
ables maintained consistently the same signs in the two equations. Peanut taste seemed to
be a well recognized positive attribute responsible for shaping attitudes which are effec-
tively transformed into purchasing decisions and determined consumption frequency. Old-
er respondents, even if they became peanut consumers, ate them with lower frequency than
younger respondents. Despite a more favorable attitude toward roasted peanuts among con-
sumers in the Northern region, they were found to eat peanuts less frequently than con-
sumers from other regions. It appears that unaccounted factors keep the Northerners from
consuming peanuts with the desired frequency. The inconsistency between behavior and at-
titude of the Northerners could be due to accessibility problem or price differential attrib-
utable to underdeveloped marketing infrastructure. Nutritional attributes of roasted peanuts
(HEALTHY and FAT) did not affect either participation or consumption decisions of Bul-
garian consumers.
5. SUMMARY AND IMPLICATIONS
Snack food market has been growing in many transition economies. Portion size, sensory
qualities, convenience, and affordability are major reasons of increasing snack consump-
tion. This study examined consumer preferences for peanuts in Bulgaria, an economy in
transition from a centrally planned to a market-oriented system. Two models were speci-
fied to identify peanut attributes and sociodemographic characteristics influencing attitude
and consumption behavior. Attitude toward roasted peanuts was modeled using the multi-
attribute approach. A double-hurdle count data model was used to estimate peanut con-
sumption model. The estimation of attitude model and the separation of the decision to pur-
chase peanuts from the consumption decision permitted the isolation of factors responsible
for consumer behavior.
Major findings of the empirical models include (a) consumer attitude toward peanuts was
mostly driven by perceived product attributes including sensory, economic, health, and nu-
tritional aspects of peanuts; (b) sociodemographic profiles did not cause differences in at-
titudes toward roasted peanuts; and (c) the actual consumption of peanuts was shaped by
sensory and economic attributes of peanuts and sociodemographic characteristics includ-
ing income, education, age, and gender; (d) consumers in the Northern region had more
favorable attitude but consumed less peanuts than consumers in other regions. These find-
ings suggest a clear distinction in the type of explanatory variables contributing to the ex-
planation of attitudes, purchase decision and consumption frequency. Furthermore, results
422 MOON ET AL.
stressed a need for critical evaluation of marketing strategies aimed at increasing con-
sumption and those designed to attract new consumers. The taste of roasted peanuts, an at-
tribute consistently and positively influencing attitudes, purchase decision, and consump-
tion intensity, plays a central role in sustaining and expanding consumption of peanuts and
peanut products. Food industry and distributors can exploit the presence of this attribute in
marketing and promotion strategies.
Attitudes did not differ across household incomes, but income was clearly a major bar-
rier to consuming peanuts. To reach a large segment of Bulgarian consumers, food manu-
facturers can use roasted peanuts as an ingredient in snacks, where the cost of other ingre-
dients would control production costs and diminish the importance of household income as
a factor limiting consumption frequency. Nearly universal acceptance of roasted peanuts
taste offers a wide range of opportunities for the development of new products using roast-
ed peanuts as ingredients.
The pronounced regional differences in attitudes and consumption and the role of de-
mographic characteristics in influencing purchase probability and frequency of eating
peanuts suggest a need for revisions in the distribution system. Accessibility to peanuts and
peanut products must be assured to expand purchases and consumption, while recognizing
that only a single age group may be responsible for the majority of purchases. In other
transition economies, many promotional campaigns were aimed at young and very young
consumers familiarizing them with the product name and developing an image matching
aspirations of the group. Bulgarian food manufacturers lack resources and expertise in or-
ganizing and implementing promotion programs, although some have a well established
distribution network. By pooling resources, both Bulgarian and foreign companies may
benefit from the opportunities of growing snack market.
This study evidenced differences between attitudes and consumption behavior eliminat-
ing an important information gap and presented empirical basis for the selection of invest-
ment and marketing decisions. Snack food manufacturing in Bulgaria already attracted at-
tention from abroad despite uncertainties regarding the governments resolve to complete
the painful reform process. However, until recently, only small foreign investors, interest-
ed in quick returns, were present in Bulgaria (Bobeva & Bozhkov, 1996). Snack manufac-
turing requires sizable resources and as the Bulgarian economy begins to expand, the pri-
vatized Bulgarian food companies are likely to pursue strategic foreign partners, including
experienced peanut processors. Snack food market is further driven by the rapid privatiza-
tion of retail sector in Bulgaria and marketing margins placed on snack foods. Anticipated
development of the Bulgarian snack food market would also have a stimulating effect on
agriculture supplying ingredients required in snack manufacturing.
ACKNOWLEDGMENT
This research was supported in part by the Peanut Collaborative Research Program of US
Agency for International Development, USAID grant No. DAN-4048-G-0041-00.
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424 MOON ET AL.
Wanki Moon is postdoctoral associate in the Department of Agricultural and Applied Economics at
the University of Georgia. Degrees earned are: B.S. in agricultural economics from Sungkyunkwan
University, Seoul, Korea, in 1987; M.S. in resource economics from Sungkyunkwan University, Seoul,
Korea, in 1989; and Ph.D. in food and resource economics from the University of Florida in 1995.
Current research interests are agricultural and food marketing, and microeconometric modeling of
cross-sectional data.
Wojciech J. Florkowski is associate professor in the Department of Agricultural and Applied Eco-
nomics, University of Georgia. He earned his first diploma from Akademia Ekonomiczna w Pozna-
niu, Poland, in 1978, and his M.S. and Ph.D. from the University of Illinois in 1983 and 1986, re-
spectively. His current research interest is agricultural marketing.
Larry R. Beuchat is research professor at the Center for Food Safety and Quality Enhancement at
the University of Georgia. He earned his B.S. from Pennsylvania State University in 1965, and his
M.S. and Ph.D. from Michigan State University in 1967 and 1970, respectively. His current research
interest lies in microbiological safety and preservation of foods.
Pavlina Paraskova is director of the Canning Research Institute in Plovdiv, Bulgaria. Degrees
earned are: B.S. in food engineering technology from the Higher Institute for Food and Flavor In-
dustry, Plovdiv, Bulgaria, in 1970; and a Ph.D. from the Higher Institute for Food and Flavor In-
dustry in 1986. Current research interests include food product development, texture studies, and
quality.
Anna V. A. Resurreccion is a professor at the University of Georgia. She earned a B.S. in food tech-
nology from the University of the Phillippines in 1964; a Graduate Diploma in food technology from
the University of New South Wales, Australia in 1969; an M.S. in foods and nutrition from the Uni-
versity of Georgia, Athens, in 1972; and a Ph.D. from the University of Georgia, Athens in 1976. Her
current research interest is consumer and sensory evaluation.
Manjeet S. Chinnan is professor of food engineering at the University of Georgia. Degrees earned
are: B.S. in agricultural engineering technology from the P. A. U. Ludhiana, India in 1969; and M.S.
and Ph.D., both in biology and agricultural engineering from the North Carolina State University,
Raleigh, in 1973 and 1976, respectively. Current research interests are: food processing and engi-
neering; modeling deep-fat frying operations; food process and product development optimization
using mathematical and statistical modeling techniques including Response Surface Methodology;
characterizing plastic and edible films for fresh and processed foods; postharvest handling and pro-
cessing of peanuts and legumes; and developing improved instrumental methods for measuring qual-
ity of foods.
Jordan Jordanov is vice director of the Canning Research Institute in Plovdiv, Bulgaria. Degrees
earned are: B.S. in agricultural economics from the Agricultural Academy, Sofia, Bulgaria, in 1969;
and a Ph.D. in economics from the Agricultural Academy, Sofia, Bulgaria, in 1987. Current research
interest is the status of the canning industry during the structural changes of the food processing in-
dustry.
THE CASE OF PEANUTS 425