The Importance of taste in experimental auctions: consumers’ valuation of calorie and sweetener labeling of soft drinks

A majority of purchases that consumers make are classified as repeat purchases. One of the main reasons why consumers make repeat food purchases is the food's taste. Therefore, we examined the importance of including taste testing in nonhypothetical experimental auctions. Specifically, we used two experiments to determine consumers’ willingness to pay for soft drinks labeled with different calorie and sweetener information. In Experiment 1, participants tasted the soft drinks prior to the bidding rounds. In Experiment 2, participants did not taste the soft drinks prior to the bidding rounds. Bidding behavior for the soft drinks was significantly different between Experiment 1 and Experiment 2. Results suggest that including taste testing in the design of experimental auctions is important to accurately capture consumers’ willingness to pay for foods that are purchased repeatedly. Results also imply that policies aimed at combating obesity by making the calorie content of foods more visible may not produce desired outcomes.     

Willingness to Pay for Multiple Quantities of Animal Welfare Dairy Products: Results from Random Nth‐, Second‐Price,and Incremental Second‐Price Auctions

Nonhypothetical experimental auctions are used to elicit willingness to pay for humane animal care‐certified dairy products: cheese and ice cream. We use second‐price, random Nth‐price, and incremental second‐price auctions in multiproduct, multiquantity, and multiround contexts. The results contrast participants’ bids across different auction mechanisms and different products. Differences in bidding patterns are detected across auction mechanisms as well as products. Our results suggest that subjects on average are only willing to pay a premium price for one unit of humane animal case‐certified ice cream but not for multiple quantities.     

Willingness to Pay versus Expected Consumption Value in Vickrey Auctions for New Experience Goods

Over the past two decades, Vickrey auctions have been widely used to elicit willingness to pay for new food products. This article shows that in a multiperiod context, it can be optimal for consumers to bid higher than the expected consumption value for a new experience good to obtain information about how the new good fits into their preference set. The degree of uncertainty about the consumption value, the purchasing frequency, and expected future market prices affect both the expected value of the quality information and the subgame perfect bidding strategy in Vickrey auctions for new experience goods.     

Consumer Attitude towards Organic Labeling Schemes in Japan

ABSTRACT

Japan is the most lucrative organic market in the Asian region and is projected to account for about 80% of the Asian market revenues by 2009 (Kuhlmann and Jones, 2006). This study identifies Japanese consumer preference and interest in two major labeling information- source of organic certification/traceability and country of origin for organic food products. Stated preference method (SPM) based survey data was collected from two major cities in Japan in order to develop Japanese consumers' organic food choice model. Findings show that Japanese consumers are willing to pay 10% price premium for the organic food products compared to conventional products that have no specific labeling, suggesting a significant profit margin to be possibly captured by the organic producers and marketers. The Japanese consumers have perceived value of the JAS label in their stated preference and showed willingness to pay a price premium for this quality certification system, which validates the importance of government-regulated mandatory labeling. Regarding the country origin labeling issue, the Japanese consumers showed clear preference for the domestic organic products to the imported products, while showing no preference for any particular country origin for imported organic products. For private-voluntary organic labeling, the consumer organization-led organic label is considered to be more reliable source than the retailer-guaranteed organic label.     

Vietnamese Consumers’ Willingness to Pay for Safe Pork in Hanoi

Abstract

Food safety is one of the main concerns and the biggest challenge for consumers due to its direct influence on human health. In order to deal with unsafe food situation, the demand for food hygiene has increased in recent years as well as the consequent increase in price accepted by consumers. This study aimed to estimate consumers’ willingness to pay (WTP) and to examine the determining factors influencing their WTP for safe pork using double-bounded dichotomous choice contingent valuation method (DBDC CVM). The data were collected from a survey with a sample size of 134 respondents in Hanoi, Vietnam using two sets of questionnaires on the consumption of rib and shoulder of pork. The results revealed that the percentages of the consumers willing to pay a premium for more hygiene shoulder and rib of pork were 81.75% and 73.01%, respectively. The mean WTP was 129,000 VND (US$6.07) for both safe shoulder and rib, 48.7% and 37.8% higher than the regular market price, respectively. The results showed that consumers’ awareness of the risk of unhealthy pork, household income and expenditure were the positive determinants to WTP; meanwhile, the amount of pork consumption per month negatively affected the willingness to pay more for shoulder and rib of pork.     

European Consumers' Willingness to Pay for U.S. Beef in Experimental Auction Markets

Consumers' willingness to pay for Irish, Norwegian, U.S. hormone-free, and U.S. hormone-treated beef was studied in an experimental auction market. We ran four simultaneous second-price auctions to elicit efficiently the complete distribution of willingness to pay differences among our four alternatives. Most participants preferred domestic to imported beef, and half the participants preferred Irish to U.S. hormone-free beef. Hormone-treated beef received the lowest mean bid, but 28% of the participants were indifferent or preferred U.S. hormone-treated to U.S. hormone-free beef.     

The impact of deal‐proneness on WTP estimates in incentive‐aligned value elicitation methods

Even after controlling for hypothetical biases, some incentive‐aligned value elicitation methods still produce different willingness‐to‐pay (WTP) estimates. In this study, we compare WTP estimates from three incentive‐aligned value elicitation methods: real choice experiment (RCE), real double‐bounded dichotomous contingent valuation (RCVM), and Becker–DeGroot–Marschak auction (BDM). We find that participants’ aggressiveness in obtaining low prices (i.e., “deal‐proneness”) influences WTP estimates in the BDM auction, but not those elicited from the RCE and RCVM. The participants with higher levels of deal‐proneness tend to submit lower bids in the BDM auction. The discrepancies in WTP estimates between different incentive‐aligned procedures are narrower for participants with lower levels of deal‐proneness. Our results indicate that the bids in BDM auctions may be understated and the auction mechanism may induce the “gambling behavior” of people who are deal‐prone. That is, whether the BDM auction is truly incentive‐aligned is again called into question. We also discuss the practical implications for food retailers.     

Differentiating the consumer benefits from labeling of GM food products

Although recurrent evidence is found that consumers have different willingness to pay for GM and non-GM products, there is disagreement in the scientific community about the size of consumer benefits from GM labeling. In this article we use a theoretical model based on a standard constant elasticity of substitution (CES) to explain the importance of the quality effect. It is shown that failing to consider the quality effect may yield an overestimation of benefits from GM labeling, voluntary or mandatory.     

Valuing traceability of imported beef in Korea: an experimental auction approach*

The major objective of this study is to estimate Korean food shoppers’ willingness to pay (WTP) for imported beef with traceability. We use an experimental elicitation method, the random nth price auction, to identify consumers’ valuation for traceable imported beef. We also analyse the effect of different types of information on these valuations. Results indicate that consumers are generally willing to pay a 39 per cent premium for the traceable imported beef over similar beef without traceability. Results also suggest that in contrast to the insignificant effect of positive information, negative and two‐sided information about traceability significantly reduces WTP.     

Strategies for integrating farmers into modern vegetable supply chains in Vietnam: farmer attitudes and willingness to accept

In Vietnam, the development of so‐called ‘modern’ vegetable supply chains is receiving considerable interest amongst researchers and governments. This interest partly stems from the view that enhancements in food safety can be achieved if farmers are willing to adopt supply chains that are often associated with ‘western’ forms of retailing. Our study investigates farmers’ willingness to change to two ‘modern’ alternatives – a supply model based on cooperatives and another based on investors facilitating the change. Using discrete choice data drawn from 412 farmers, mixed logit models in willingness to pay space are developed that reveal the relative importance of different drivers of change. The paper offers insights that can inform governments about the incentives required to bring about change. In addition, the paper illustrates the novel application of a choice experiment to enumerating the perceived costs of changes in vegetable supply chains.     

基于能源消费碳足迹的广西低碳经济发展研究

当前,为探索人类活动对全球碳循环的影响,经济活动与能源消费的碳排放成为目前国内外学术界研究的热点问题。通过阐述碳足迹概念和构建碳足迹模型,计算分析了2000～2009年广西的能源消费碳足迹,并在分析能源消费碳足迹的影响因素的基础上,提出了优化能源结构、引导合理的能源消费结构、适当调整经济产业结构和积极发展服务业等广西低碳经济发展建议。     

Information Barriers to Adoption of Agricultural Technologies: Willingness to Pay for Certified Seed of an Open Pollinated Maize Variety in Northern Uganda

We examine smallholder farmers’ willingness to pay for agricultural technology and whether information is a constraint to adoption of certified maize seed in Northern Uganda. The uptake of improved maize varieties by smallholder farmers in Uganda remains persistently low, despite the higher yield potential compared to traditional varieties. A recently growing body of literature identifies information constraints as a potential barrier to adoption of agricultural technologies. We used incentive compatible Becker‐DeGroot‐Marschak auctions to elicit willingness to pay for quality assured improved maize seed by 1,009 smallholder farmers, and conducted a randomised evaluation to test the effect of an information intervention on farmers’ knowledge of seed certification. Our results show that the randomised information treatment enhanced farmers’ knowledge of certified seed. However, using the information treatment as an instrumental variable for knowledge, we find no evidence of a causal effect of knowledge on willingness to pay, suggesting that even though farmers are information constrained, this constraint does not affect adoption of certified seed directly. Nevertheless, only 14% of sampled farmers were willing to pay the market price, which corresponds closely with actual observed demand for certified seed in the previous season. This suggests that there are other barriers to adoption than information and awareness.     

Can willingness‐to‐pay values be manipulated? Evidence from an organic food experiment in China

Human behaviors are driven by implicit and explicit motives. Psychologists have developed two main tools, namely time pressure and cognitive load, to disentangle the two motives. This implies values of willingness to pay (WTP) may be sensitive to time pressure and cognitive load levels in practice. An experiment with 233 students was conducted in China to study the willingness to pay for organic food with consideration of different time pressures and cognitive load levels. Results show that (1) increasing cognitive load could significantly reduce consumers’ WTP for organic food; and (2) time pressure does not have a significant impact on WTP values. Such results suggest researchers should be particularly cautious about the cognitive load situations of respondents during a WTP survey.     

Impact of Purchase Intentions on Full and Partial Bids in BDM Auctions: Willingness‐to‐pay for Organic and Local Blueberries

We conduct a series of Becker–DeGroot–Marschak (BDM) auctions to elicit consumers' willingness‐to‐pay (WTP) for organic and local blueberries. Participants' intentions to purchase the auction product were collected to determine how purchase intentions for the auction products affect their partial bids (WTP for an additional attribute) as well as full bids (WTP for the auction product). The results suggest, as expected, that full bids from participants with purchase intention for the auction product are significantly higher than those from participants without purchase intention. However, the partial bids, which are inferred from the full bids, for organic and local attributes are consistent across participants with different purchase intentions. Therefore, if the focus of a BDM auction is consumers' WTP for product attributes, purchase intentions may not be an important influence on the value.     

Agricultural Biotechnology: A Comparison of Consumers' Preferences for Selected Policy Options

This paper reports on a study of consumers' preferences for regulatory policies that relate to food biotechnology. Data on consumers' choices of selected policy options were collected through a telephone survey of Alberta residents conducted in early 2000. Conditional and mixed logit models were developed and tested. These assess the influence of different socio-economic factors on respondents' choices of particular policy options and are used to estimate respondents' willingness to pay for two policy options that were the major focus of the study, specifically:

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  a food labeling system that gives more information about agricultural biotechnology for

       
  
  

Canadian beef and dairy farmers’ attitudes towards animal vaccines

The willingness to pay (WTP) approach is increasingly being used in different disciplines to assess peoples’ readiness to accept change. This paper assesses the potential for two subunit vaccines for the prevention and control of bovine tuberculosis and paratuberculosis in cattle. A survey of beef and dairy farmers was conducted across Canada to identify factors that influence their WTP for subunit vaccines. Estimated results of the interval‐data model indicate that the size of a farmer’s cattle herd, neighbourhood effect, and buyer recommendations for vaccination significantly influence farmers’ WTP while veterinarians appear to be the most critical pathway for farmers to source information on new vaccine options. The mean willingness to pay amounts for both vaccines reveals that farmers are likely to use the vaccines if the costs are kept at reasonable level.     

Product Labeling and Economic Value of Milk Market Segmentation

Abstract

This study explores the economic benefit from labeling milk and milk products and its impact on the supply and demand for fluid milk. The empirical estimate measures the economic value of milk market segmentation based on consumers' willingness to pay for hormonefree milk. The study uses survey data from Kansas households and applied a Probit model for willingness-to-pay and an ordinary least square model for demand analysis. The empirical results show that as long as consumers are willing to pay a higher price for bSTfree milk society would benefit from milk market segmentation.     

农村居民生活垃圾治理费支付意愿与支付水平分析

[目的]农村居民付费是弥补生活垃圾治理资金缺口的有效途径,系统研究农村居民生活垃圾治理费支付意愿与支付水平及影响因素,有益于推动建立农村居民生活垃圾治理付费制度。[方法]文章基于覆盖江苏全部地级市的2 420个农户调查数据,采用Heckman两阶段模型进行实证分析。[结果]（1）农村居民以不分类处理生活垃圾为主,有约2/3的农村居民愿意为治理生活垃圾支付费用,并愿意每户每月支付49.31元或每人每月支付19.84元。（2）健康状况、常住人口、年底净资金、奖惩措施均会显著影响农村居民生活垃圾治理费支付意愿。（3）年龄对农村居民生活垃圾治理费支付水平有显著的负向影响,年底净资金、生活垃圾处理方式、村组织在人居环境整治方面的作用、对相关法律法规的信任度、奖惩措施、个人环保行为认定、生活垃圾对社区环境影响以及地区变量对农村居民生活垃圾治理费支付水平有显著的正向影响。[结论]应合理测定支付标准、完善农村生活垃圾投入机制、制定实施相关政策法规,以引导农村居民支付生活垃圾治理费。     

Marketing Premium Food Products in Emerging Economies

Abstract

Developing branded food products, that signal higher standards, presents a challenge to processors in newly emerging markets. Many studies have been conducted to learn about consumer awareness and willingness to pay for higher quality products with particular attention to local origin, organic, or environmentally friendly products in developed countries. This study focuses on attributes that may increase demand for domestic cheese in Macedonia. We find the willingness to pay to premiums for higher quality, taste, consistency and certified “safe” cheese is relatively high, and with respect to determining target markets, income, region, shopping behavior and various other demographics all help to delineate potential consumers of premium cheese.     

改进的区域旅游业碳足迹测度模型及张家界实证研究

将成分法和生命周期法结合运用,建立起区域旅游业温室气体排放的测算模型,将区域旅游业的碳足迹分为旅游开发过程中的碳足迹,旅游消费过程中的旅游交通碳足迹、旅游餐饮碳足迹、旅游购物碳足迹、旅游住宿碳足迹、旅游游览碳足迹、旅游娱乐碳足迹,旅游废弃物处理过程中的旅游用水碳足迹和旅游固体废弃物碳足迹,并对张家界旅游业碳足迹进行实证分析。结果表明,张家界的旅游业属于低碳旅游业。