Our study explores how production location decisions impact consumer preferences, particularly willingness to pay (WTP), and how to use sustainability perceptions and values as underlying mechanisms. Our research highlights the importance of perceived quality and environmental and social sustainability in shaping consumer behavior, with local production often viewed more sustainable and favorably. We employ a multi-method approach to test our conceptual framework. Study 1 utilizes an online survey with a choice-based conjoint (CBC) analysis to measure stated preferences for products with varying origins. The study covers multiple product categories and captures perceptions of origin, personal values, and demographic data. Study 2 complements these findings through a controlled lab experiment, introducing real monetary incentives to capture revealed preferences and address social desirability bias. Together, these studies provide robust insights into consumer preferences for local and sustainable products. Our findings show that product origin significantly influences consumer decision-making, with local products consistently associated with higher WTP. This preference is driven by product-specific perceptions of higher quality and/or environmental and social sustainability and by personal values. By integrating consumer perspectives into production location decisions, our research highlights the dual benefits of aligning operational strategies with sustainability goals: enhancing profitability through higher WTP and supporting more sustainable supply chains that contribute to broader environmental and social objectives.
