Wiktor Budziński, Ricardo Daziano
In this study, we employ a choice experiment to analyze New York City residents’ preferences for online grocery shopping at the beginning of the COVID-19 pandemic. We employ a latent class specification to identify three market segments and estimate consumers’ willingness to pay for a variety of attributes of online grocery services related to the quality of the stock, delivery characteristics, and the cost of the online order. We characterize consumers in each segment by their observed characteristics as well as fear-related latent variables. On the one hand, we find that individuals who are actively protecting themselves against COVID-19 have a higher willingness to pay for almost all attributes. On the other hand, consumers who avoid crowds have a lower willingness to pay, but they assign relatively higher importance to no-contact delivery.