Consumer willingness to pay for sustainable apparel: the influence of labelling for fibre origin and production methods

This study of value‐based labelling for apparel products examined consumer willingness to pay (WTP) for three credence attributes of fibre: origin, type and production method. Experimental auctions were conducted with student subjects in Texas and used socks made from cotton and polylactic acid (PLA), a fibre manufactured from corn. The bid results of two rounds were compared. The first round was conducted without information about the credence attributes of the socks. The second round included varying levels of three types of attributes: fibre origin (imported, US and Texas), fibre type (cotton and corn) and production method [conventional, organic and non‐genetically modified (GM)]. Tobit regression analysis was performed using the attributes and subject demographics to determine consumer WTP for the various attribute levels and to profile consumers with interest in the attributes. In terms of origin, results show that participants were willing to pay a premium for socks with fibres produced in Texas, but not for those produced in the US. Fibre type mattered, with participants requiring a discount once they learned that socks were made with PLA fibre. The greatest premium ($1.86) was placed on socks labelled as organic, slightly more than the premium for socks labelled as non‐GM. The results also indicate that women were less willing to pay for US fibres than men, and Hispanics were less willing to pay for organic or non‐GM fibre production. A key finding of this study is that consumers value information about the local origin of fibres. The premium for organic fibres is not unexpected, given the success of the organic apparel market, but the premium on non‐GM fibres suggests that sustainable production systems that are not organic may be successful if they emphasize other attributes such as local or non‐GM.     

Local and/or organic: a study on consumer preferences for organic food and food from different origins

This paper gives a deeper insight into consumer preferences for different food products of varying place of origin (i.e. local, Germany, neighboring country, non‐EU country) and production practices (i.e. organic vs. non‐organic). Consumer surveys combined with choice experiments were conducted with 641 consumers in eight German regions. Mixed logit models were estimated to draw conclusions on consumers’ preferences for different product attributes. The Stimulus‐Organism‐Response model was applied to theoretically frame the key findings. Results reveal that consumers prefer locally produced food to organic food. However, conclusions on consumers’ preferences should not be generalized as they vary depending on product type and consumers’ place of residence. When looking at the willingness‐to‐pay estimates for ‘organic’ and ‘local’ while distinguishing among consumers from different regions of Germany, results indicate that consumers living in rural areas and consumers living in the eastern part of Germany are less willing to pay a premium for organic products than urban consumers and consumers from other parts of Germany. As preferences for origin attributes and organic production vary between different food products and in different regions of Germany, market actors should design marketing activities accordingly. This study adds to the international research on consumers’ preferences for organic and/or local food. The results provide better insights into preference structures, as more than one product has been included and surveys were conducted in different regions across Germany.     

Will consumers accept irradiated food products?

This study examines consumers’ willingness to pay for irradiated beef products. About 58% of the respondents are willing to pay a premium for irradiated beef. An ordered probit with sample selection model was estimated. Standard errors of the marginal effects of the ordered probit model were estimated using the bootstrap method. Our findings suggest that females and those who think that improper handling contributes to food poisoning are more likely to pay a premium of 50 cents per pound for irradiated beef than others. Those who trust the irradiation technology are also more likely to pay a premium of between 5 and 25 cents per pound for irradiated beef. Supply chain implications are discussed.     

Food Safety and Consumers' Willingness to Pay for Labelled Beef in Spain

Abstract

The objective of this paper is to assess the quality/safety value for beef consumers, measuring their willingness to pay a price premium for labelled beef. From a survey conducted among food shoppers within the household, consumers are segmented according to their safety perception of specific food products. For each segment, their willingness to pay for labelled beef is calculated. Finally, the main factors explaining such a decision are considered. The results indicate that food scares, the perception of a negative impact of agricultural production on the environment and health concerns are having a major impact on the food consumer purchasing decisions for beef. However, most consumers are not willing to pay a price premium for labelled beef.     

Effect of Normative and Affective Aspects on Willingness to Pay for Domestic Food Products—A Multiple Price List Experiment

There is limited knowledge about which factors underlie consumers’ preferences for domestic food products. We used a non-hypothetical multiple-price list experiment to investigate the effect of affective (product-related emotions) and normative (consumer ethnocentrism and subjective norms) factors on consumer willingness to pay for domestic food products. A total of 166 Croatian consumers were given a choice between domestic and foreign food products with different price premiums for domestic food. The results indicate that consumers are willing to pay a premium for both low- and high-involvement domestic food products. Consumer willingness to pay for domestic products is influenced by ethnocentrism, product-related emotions, and sociodemographic variables, but not by social norms.     

The effect of information on consumers' willingness to pay for natural and organic chicken

This study examined the effect of definitions for organic and natural on willingness to pay a premium for organic over natural chicken. Data were collected using surveys and experimental auctions that were conducted before and after information was presented. Before information, approximately two‐thirds of participants inaccurately equated the requirements of natural with those for organic. After information, nearly 50% increased their premium, while 30% decreased their premium. Logistic regression results showed that consumers who had overestimated the requirements for natural were most likely to have an increased premium after information, with significantly higher bids for organic. For those who decreased their premium after information, awareness of consuming genetically modified (GM) foods was a key variable. The non‐genetically modified (non‐GM) requirement of organic appears to be of low value to some consumers. Overall, consumer confusion regarding organic and natural standards may be having substantial impacts on the two markets.     

Do Consumers Care about Ethics? Willingness to Pay for Fair‐Trade Coffee

Consumers’ buying behavior is not consistent with their positive attitude toward ethical products. In a survey of 808 Belgian respondents, the actual willingness to pay for fair‐trade coffee was measured. It was found that the average price premium that the consumers were willing to pay for a fair‐trade label was 10%. Ten percent of the sample was prepared to pay the current price premium of 27% in Belgium. Fair‐trade lovers (11%) were more idealistic, aged between 31 and 44 years and less “conventional.” Fair‐trade likers (40%) were more idealistic but sociodemographically not significantly different from the average consumer.     

Consumer Willingness-to-Pay for Food Safety in Taiwan: A Binary-Ordinal Probit Model of Analysis

A probit model for whether or not consumers are willing to pay a premium for hydroponically grown vegetables (HGV) is estimated jointly with an ordered probit model analyzing the magnitude of such premiums for consumers who would pay them. Results of the joint estimation and the conventional single equation ordered probit model were presented for comparison. Unlike the single equation approach, the joint estimation allows the flexibility of parameterizing separately the probability and level of premiums that a consumer is willing to pay for a safer food. The results show that family health status and household income are the most important and significant factors that determine the amount of premium a consumer is willing to pay for HGV. However, they are insignificant in predicting the likelihood of a consumer's willingness-to-pay a higher price. In addition, marginal probabilities were calculated to assess the influence of various socioeconomic and attitudinal variables on the likelihood that a consumer would be willing to pay a premium for HGV and the additional amount of premiums.     

Corporate social and environmental responsibility in services: Will consumers pay for it?

Two studies investigate consumer awareness of and response toward socially and environmentally responsible practices in the hospitality industry. Results suggest that consumers exhibit more positive response toward establishments exhibiting higher levels of social responsibility, although many are uninformed of the extent to which the organizations they patronize engage in such practices. Most consumers are willing to incur a modest price increase while patronizing an organization that behaves in an environmentally and socially responsible fashion, but that willingness declines dramatically as the price premium escalates. Consumers with high involvement in and positive attitudes toward corporate social responsibility practices are most willing to pay a premium.     

Who Buys Fair Trade and Why (or Why Not)? A Random Survey of Households

We conduct a random survey of Michigan (United States) households to gauge consumer behavior toward, and awareness of, fair trade. Around 58% of respondents have heard of fair trade and just over a quarter have knowingly purchased a fair‐trade product. Of the 38% of respondents who indicated a willingness to pay a premium for a fair trade product, the median premium they were willing to pay was around 20%. We find that those who are politically liberal, female, younger, and have attained higher levels of education are willing to pay higher premiums for fair trade, other factors held constant. Respondents who are unwilling to pay a fair trade premium are divided between not doing so because of a belief that all voluntary trade is already fair and a fear of potential unintended negative consequences on workers.     

Private-label branding and willingness to pay: evidence from an auction experiment

The competitive pricing of private-label brands is a strategy used to gain a competitive advantage. Notwithstanding the introduction of many private-label brands – i.e. private-label brands with a name identical to that of a firm (own-name brands) and private-label brands with a name distinctive from that of a firm (other-name brands) – that compete with national brands, identifying equitable prices that reflect brand value remains difficult. This study aims to determine the appropriate price of private-label brands by measuring consumers’ willingness to pay. An experimental auction method measures ‘actual’ willingness to pay in a non-hypothetical setting. The study was conducted in Thailand, which has the lowest price discrepancy between national brands and private-label brands. The results show that the willingness of consumers to pay for both types of private-label brands is higher than that for un-branded products. However, there is no significant difference in the premium between own-name and other-name private-label brands. Unlike leading and second tier national brands, consumers are willing to pay a discounted price for both own-name and other-name private-label brands; for the latter, they are willing to pay a more steeply discounted price. The finding of this study regarding the amount that consumers are willing to pay for an own-name private-label brand is consistent with the current market price strategy, whereas the current market price strategy for other-name private labels is inconsistent with the amount participants are willing to pay. The study shows that to appropriately price their products in a manner that yields the highest returns, retailers must determine how much consumers are willing to pay.     

A comparative investigation between functional foods and their alternatives with respect to medical claims made

The Centres for Disease Control and Prevention estimate that 76 million people get sick, more than 300 000 are hospitalised, and 5000 Americans die each year from food‐borne illness. Research over the past 40 years has shown, however, that food irradiation can decrease the incidence of food‐borne illness and disease. Despite this benefit, food irradiation has been the focus of much controversy for years. Proponents of irradiation claim that it will improve food product safety by reducing harmful bacteria. Opponents, on the other hand, raise concerns about its long‐term health effects, nutrient loss, and worker safety at irradiation facilities. The debate intensified recently when the US government approved the use of irradiation to kill E. coli 0157:H7 and other harmful bacteria in ground beef and other raw meat. The US Department of Agriculture and the Food and Drug Administration are also expected to decide soon whether to allow the process to be used on sandwich meats, hot dogs, and similar packaged food products. This study examines consumer willingness to pay for irradiated beef products. About 58% of the respondents are willing to pay a premium for irradiated beef. An ordered probit with sample selection model was estimated. Our findings suggest that females and those who think that improper handling contributes to food poisoning are more likely to pay a premium of 50 cents per pound of irradiated beef than others. Those who trust the irradiation technology are more likely to pay a premium of between 5 and 25 cents per pound for irradiated beef.     

Brakes to organic market enlargement in Spain: consumers’ and retailers’ attitudes and willingness to pay

In Spain, consumption of organic products has not kept pace with production. Up till now, foreign markets have been a natural destination for excess supply. However, world trade liberalization might cause important commercial problems to Spanish producers that could be partially solved by enlarging the domestic market. The goal of this paper is to assess the opportunity for such enlargement focusing on two main aspects: consumers’ and retailers’ attitudes and willingness to pay for organic products. Concerns about health, natural diets or environmental issues could stimulate consumption, while retailing dynamism and competition to gain new market segments might favour distribution. Both aspects are investigated through two surveys addressed to consumers and retailers in two Spanish towns. The results confirm that only a small proportion of consumers and distributors show attitudes that might favour demand expansion. The most sensitized segments are willing to pay more for organic products, but this premium is still very far from the prevailing gap between conventional and organic food products.     

Willingness to pay for organic products: Differences between virtue and vice foods

Faced with growing environmental problems, food safety issues, and increasing obesity rates, many consumers desire healthier, less processed natural foods that are less harmful to the environment. Yet organic foods only partially benefit from this market environment, and their market share remains quite low despite high growth rates. The usual explanation for this discrepancy is that consumers are not willing to pay the price premium prompted by an organic claim. In this paper, we explore the reasons behind consumers' (un)willingness to pay for organic food and investigate whether it differs between virtue and vice food categories. The results indicate that in vice food categories, organic claims are associated with lower quality, which seems to be only partly compensated by higher prosocial benefits. The lower-quality perceptions translate into a decreased consumer willingness to pay (WTP). We supplement the empirical results with data on organic purchases in the Dutch food market. These data show that market shares of organic food are indeed lower for vice categories of organic food.     

The value of private label brands to U.S. consumers: An objective and subjective assessment

This study investigates the value of private label brands to consumers using two approaches: First, subjective evaluations of the perceived relationships between price and quality for private label (PL) brand and national brand (NB) products based on survey responses; and second, objective measures of price and quality for PLs and NBs widely available in the U.S. Price was generally perceived to be a signal of quality for NBs, but not for PLs, an indication that consumers' knowledge may not have kept pace with quality improvement in PLs. Objective estimation of the quality gap potentially existing between PLs and NBs determined that the “quality premium” of NBs observed in the past has largely disappeared. Consumers, notwithstanding, sought a lower purchase price for PLs. In turn, the higher price they were willing to pay for NBs accorded with estimates of the actual “price premium” associated with NBs.     

Employing a Dichotomous Choice Model to Assess Willingness to Pay (WTP) for Organically Produced Products

Abstract

This study employs a dichotomous choice model to identify the socio-economic characteristics and attitudes that influence consumers' willingness to pay (WTP) a premium for organically produced products (OPP). Considering consumers' growing interest in quality and safety of food, the study attempts to identify consumers level of awareness on OPP, the intention to buy OPP and the WTP a higher price for OPP. Results highlight consumers awareness and intention, revealing useful information for the development of OPP market. The estimated maximum WTP indicates that consumers are willing to pay a substantial extra price to purchase OPP. Finally, WTP seems to be affected by certain consumer attitudes and socio-economic factors.     

Factors Influencing Consumers’ Willingness to Pay for Organic Fruits and Vegetables: Empirical Evidence from a Consumer Survey in India

Numerous consumers confronted with increasing environmental problems, food safety issues, and augmentative health problems increasingly desire to have healthier and more natural foods grown in an eco-friendly manner. Hitherto organic foods only partly benefit from this increasing market environment, and their market share stays rather low despite high growth rates. This article aims to investigate consumers’ willingness to pay (WTP) for organic fruits and vegetables and relevant factors affecting consumers WTP. The contingent valuation method was selected to estimate WTP. Empirical data was drawn from a 250-consumer survey conducted in Bangalore during February 2013. A binomial logistic regression model was applied to obtain the value of WTP and determine the factors influencing it. The results indicated that about 90% of the consumers were willing to pay a premium price ranging between 5% to more than 100% in order to acquire better-quality fruits and vegetables; factors such as family income, size of the family, gender, and other opinion variables such as chemical residue in conventional foods, trust on retailers, taste, and environmental concerns significantly influence consumers’ WTP. More than 87% of the consumers indicated that high price, lack of availability, narrow range, and irregular supply are the major barriers for them to buy these products. The results provide useful evidence to pertinent governmental agencies in terms of assisting in the design of policies for the promotion of organic food production and marketing and reaching the target public. Furthermore, firms involved in the organic foods business may also see benefits when drawing information in order to calibrate marketing strategies.     

Willingness to Pay for Golden Rice in India: A Contingent Valuation Method Analysis

We estimated students’ willingness to pay for golden rice by using the double-bounded contingent valuation method. We found that nearly 55% of the students are willing to buy golden rice at the same price as that of conventional rice, and around 85% at a certain discount. The estimated mean willingness to pay is a 4% price premium. Furthermore, we found that global (food security) and personal (health) benefit perceptions have a positive significant influence, and risk perceptions and sociodemographic variables have an insignificant influence on willingness to pay for golden rice. Overall, our findings indicate that India has a potential market for golden rice.     

Price Acceptance for Organic Milk in Beijing,China

This study examines Chinese consumers’ acceptance and price willingness to pay for organic fluid milk. We used questionnaire data gathered in 2014 to analyze the impact of price and milk knowledge, as well as consumer age, gender, education and income on organic milk choice. The results indicate that: 1) young females with a strong educational background have shown the strongest consumption desire for organic milk; 2) those who shop for the family tend to support organic milk and are willing to pay more for the milk; 3) shoppers with more disposable income are willing to pay a premium price for organic milk.