Can immersive virtual reality be an alternative world for eliciting consumer willingness to pay for food?

This study examines whether consumers' willingness to pay (WTP) for ready-to-eat cereals differs between immersive virtual reality (IVR) and real-world (RW) environments. Real choice experiments were conducted with 227 respondents who selected reservation dates without knowing whether they corresponded to the IVR or RW setting. To derive consumers' WTP, random parameter logit models were estimated primarily in WTP space, while preference-space models were used as a robustness check. The results show no significant differences in WTP between IVR and RW for any of the cereal products tested. This suggests that consumers' product choices in IVR environments are based on monetary valuations, similar to those in real environments. When combined with real economic incentives, IVR-based choice experiments may therefore yield WTP estimates comparable to those obtained from conventional real choice experiments. To our knowledge, this is the first study to compare WTP between IVR and RW environments using an incentive-compatible experimental design.