Consumers' Willingness to Pay for Quality and Safety in Clams

The aim of the research is to estimate the potential demand for certified clams in Italy and to investigate the determinants of maximum amount that respondents are willing to pay for this product. Quantitative analysis was used based on 1,067 face-to-face interviews collected in 3 Italian regions in the north bordering the Adriatic Sea (Friuli-Venezia Giulia, Veneto, and Emilia-Romagna) carried out during 2008. The consumers' willingness to pay (WTP) is measured using a contingent valuation method. In order to estimate separately the determinants of the probability that respondents are willing to pay and the maximum that they are willing to pay, a generalization of Tobit model was adopted. The results indicate that consumers are willing to pay a premium price mainly to purchase better quality products. The research provides some initial insight into consumers' WTP that can be useful for certified fish farming.     

Consumers' willingness to pay for food quality - The case of eggs

The aim of this paper is to introduce an approach to estimating the marginal willingness to pay (WTP) for food quality and safety using data on actual consumer purchases. Marginal WTP for specific food product varieties can be derived from estimated demand functions by inverting the relations, thereby expressing the prices consumers are willing to pay as functions of quantity demanded. The task addressed in the paper is isolation of the WTP for quality attributes embedded in the varieties. Two models based on the AIDS-specification are proposed and discussed. To illustrate the applicability of the models, the case of five varieties of eggs is presented. It is found that Danish consumers are willing to pay a relatively high premium for improved animal welfare and organic production methods and somewhat less for food safety.     

Farmer perception and valuation of seed quality: Evidence from bean and cowpea seed auctions in Tanzania and Ghana

Double blind field experiments and experimental auctions were conducted with bean and cowpea farmers in Tanzania and Ghana to gauge the relative demand for three types of seed products that differ in price and quality: certified, quality declared, and recycled. Whether the cost differential makes these seeds qualitatively different products as reflected in their perceived performance, and whether that translates into farmers’ willingness to pay price premiums, are the research questions addressed by this study. Results indicate that, all else equal, there were significant differences in the perceived quality of the seed products evaluated. Farmers were willing to pay significantly more for their higher rated seed relative to their lower rated seeds. However, for a majority of farmers the magnitude of the premium they are willing to pay for a higher quality seed is less than the current price differential between certified seed and grain. Research and policy implications of these results for legume seed system are discussed.     

Eliciting Consumer WTP for Food Characteristics in a Developing Context: Application of Four Valuation Methods in an African Market

We elicit willingness to pay for conventional, organic and/or food‐safety‐inspected tomatoes in a traditional African food market. We identify four elicitation methods that can be conducted with one respondent at a time, and use them in a field setting: the Becker–DeGroot–Marschak mechanism, multiple price lists, multiple price lists with stated quantities, and real‐choice experiments. All four methods give similar results; showing that consumers are willing to pay a premium for organic and food‐safety‐inspected tomatoes. However, the size of the premium is significantly larger when consumers choose between alternatives than when they indicate their reservation price. The new multiple price lists with stated quantities were easy to explain in the busy market setting, gave the respondents the opportunity to determine the amount they wanted to buy, and had valuations in line with the other non‐comparative valuation methods.     

Consumers’ Trust in Food Quality and Willingness to Pay More for National Parks’ Brands: Preliminary Evidence From Italy

In Italy, national parks allow the use of their brand logo and name on the labels of food products produced by firms located within the national parks. However, no empirical research has yet investigated the impact of national park brands on consumers’ attitudes and behaviors. Hence, this empirical study explores the factors that influence consumer trust in food quality and their willingness to pay premium prices for the national park brands. Results from a survey involving a sample of 227 Italian consumers suggest that women and younger consumers trust more and are more willing to pay for national park brands. The origin of food products associated with national parks, naturalness of foods, food quality certifications and branding, and the environment in which the packaged foods originate influence consumer confidence and buying behavior. Implications for food marketers and policymakers are discussed.     

Valuing Quality Attributes and Country of Origin in the Korean Beef Market

For beef exporters, one of the important questions in the Korean beef market is why Korean consumers are willing to pay almost three times more for domestic Korean beef than they pay for imported beef. To answer this question, we surveyed 1,000 shoppers in Seoul, Korea, and conducted a conjoint analysis on consumers’ willingness to pay (WTP) for country equity of domestic vs. imported beef and quality attributes of marbling, freshness, genetically modified organism (GMO)‐free feed ingredients and antibiotic‐free production. Among all factors contributing to the price differentials, the most important factor seems to be the country of origin followed by the use of GMO feeds and antibiotics in beef production, marbling grade and freshness. This study finds that Korean consumers value origins of imported beef approximately $14/lb less than the Korean origin. Korean consumers’ valuation of beef quality and country of origin differs by some demographic groups: older vs. younger generations, homemakers vs. non‐homemakers and consumers who prefer to purchase packaged beef vs. consumers who prefer to purchase butcher shop beef. Our empirical findings suggest that the top priority for beef exporters who wish to increase sales and value of their beef in the Korean market must be to counter Korean consumers’ strong ethnocentrism by improving the value of their country of origin.     

Valuing an EU Animal Welfare Label using Experimental Auctions

The aim of this article is to determine consumers’ valuation for an EU Animal Welfare (EU‐CAW) Label for products providing higher animal welfare standards than the current legal requirements. Using revealed preference data from random nth price auction mechanism and two auction procedures, our results generally suggest that consumers are willing to pay a premium for an EU Animal Welfare (EU‐CAW) Label for cured ham. This finding is consistent in both the endowment and full‐bidding auction approaches we employed in our experiments conducted in Spain. The average premium that consumers are willing to pay for a cured ham with the EU‐CAW Label ranges between 19% and 23% of the average price of the regular cured ham that is currently available in supermarkets.     

Beef Credence Attributes: Implications of Substitution Effects on Consumers’ WTP

Consumers’ food choices are influenced by a wide variety of credence attributes, but the food industry faces problems assessing whether the price premiums that consumers are willing to pay for these attributes will be sufficient to offset higher production costs. In this context, consumers’ willingness to pay (WTP) for safer, cleaner and animal friendlier beef was investigated through a choice experiment. The relative importance of WTP for these attributes shows that consumers place the highest values on food safety, followed by animal welfare and finally environmental protection. WTP for different combinations of the three attributes cannot be obtained by independent valuation and summation due to the presence of significant substitution relationships. However, some suggestions for the relationships between these attributes can be proposed through an after‐survey analytical solution. The bias involved in separately valuing closely related attributes can potentially jeopardise the success of a differentiation strategy.     

In-Store Valuation of Steak Tenderness

Experimental methods were used to examine consumer willingness-to-pay for steak tenderness in a grocery store setting. When relying on a taste test alone to determine product quality, the participants paid an average premium of $1.23/lb for a tender versus tough steak. Fifty-one percent of the participants were willing to pay an average of $1.84/lb when they had completed a taste test and were also provided information about the steak's tenderness. Results indicate that most consumers prefer more tender steaks and that many are willing to pay a premium for tender steaks.     

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.     

Are Local and Organic Claims Complements or Substitutes? A Consumer Preferences Study for Eggs

This paper provides an analysis of consumer preferences for product claims, specifically about origin and production methods. In particular, it addresses two important questions: i) whether consumers are willing to pay a premium for food products carrying these claims; and ii) whether local and organic claims are complements or substitutes. A choice experiment designed to estimate two‐way interactions was undertaken in Spain for eggs. The findings show first, that consumers are willing to pay a positive premium price for an enhanced method of production (that of barn, free‐range and/or organic instead of cage produced eggs) as well as for the proximity of production (local, regional and national over imported). Second, the findings show that consumer preferences for the claims are heterogeneous with two consumer segments being identified: “origin preference”, the larger segment, and the “production method preference”. Results show that organic and local claims were complements for the larger first segment but that free‐range and local/regional claims were substitutes for the second smaller segment. These results provide the marketing chains with insights applicable for pricing strategies.     

Factors Affecting Consumer Willingness to Pay for Certified Traceable Food in Jiangsu Province of China

Using data collected from a survey conducted in Jiangsu Province, China, we study consumer perceptions of and attitudes toward food traceability systems (FTS). Through econometric analysis, we examine the main factors that influence the willingness of consumers to pay a price premium for certified traceable food, as well as the actual premium these consumers are willing to bear. Our results indicate that an overwhelming majority of consumers in China are concerned about food safety, but consumers’ willingness to pay (WTP) a price premium for certified traceable food is limited. Income, education, perception of and attitudes toward FTS, as well as the degree of concern over food safety, have significant effects on the consumer's WTP a price premium for certified traceable food. However, the effects of these factors on the actual premium a consumer is willing to pay are quite different. Conditioned on the consumer being willing to pay a positive price premium, income level and the degree of concern over food safety are the only two factors that have significant effects on the actual premium consumers are willing to pay. À partir de données tirées d’un sondage mené dans la province du Jiangsu, en Chine, nous avons étudié la perception et l’attitude des consommateurs envers les systèmes de traçabilité des aliments. À l’aide d’analyses économétriques, nous avons examiné les principaux facteurs qui influencent le consentement des consommateurs à payer un prix supérieur pour des aliments dont la traçabilité est certifiée ainsi que le prix réel qu’ils sont prêts à payer. Les résultats de notre étude indiquent qu’une très grande majorité de consommateurs en Chine sont préoccupés par la sécurité alimentaire, mais que leur consentement à payer un prix supérieur pour des aliments dont la traçabilité est certifiée est limité. Le revenu, le niveau de scolarité, la perception et l’attitude envers les systèmes de traçabilité, de même que le degré de préoccupation concernant la sécurité alimentaire, ont des effets considérables sur le consentement des consommateurs à payer un prix supérieur pour des aliments dont la traçabilité est certifiée. Toutefois, les effets de ces facteurs sur le prix réel qu’un consommateur est prêt à payer sont très différents. Lorsque des consommateurs consentent à payer un prix supérieur, le niveau de revenu et le degré de préoccupation concernant la sécurité alimentaire sont les deux seuls facteurs qui influencent fortement le prix réel qu’ils sont prêts à payer.     

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.     

Estimating consumer willingness to pay for food quality with experimental auctions: the case of yellow versus fortified maize meal in Kenya

Biofortification of maize with provitamin A carotenoids is a new approach to the alleviation of vitamin A deficiencies in Africa. Unfortunately these varieties are yellow or orange, while consumers generally prefer white. Consumer willingness to pay for yellow and fortified maize was compared in experimental auctions in three regions in Kenya. The premium that consumers are willing pay for fortified maize (24%) was higher than the discount they require to buy yellow maize (11%), and in one zone consumers prefer yellow. Yellow color is, therefore, not an impossible obstacle for biofortified maize, although it would clearly be easier to introduce this maize first in regions where yellow maize is currently grown.     

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.     

Hedonic Analysis of Consumers' Valuation of Country of Origin of Meat in the United Kingdom

We estimate the implicit prices consumers are willing to pay for country of origin labels, using hedonic price methods and panel data for meat and meat products in the United Kingdom. Our results show that consumers place significant value on origin information across fresh and processed meat products, especially since the horsemeat incident in 2013. The findings also suggest that retailers have increased the use of voluntary labelling of processed meat products since the incident. Hence, further extension of existing mandatory labelling requirements to processed meat products may not be required at least in the short term.     

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.     

Analyzing the Demand for New Value-Added Product: Case of Pure Blueberry Sweetener

Analyzing the demand for a new product that is not on the market presents challenges as agricultural producers search for potential value-added products and develop marketing strategies for these products. This study examines the market potential for a new pure blueberry sweetener in Kentucky. The results from a contingent choice survey indicate that the average respondent was not willing to pay a significantly positive amount for the product. However, a small group of respondents, who can be identified by their overall blueberry purchasing intentions and age, was willing to pay a price higher than the product's cost of production. Small and medium-size producers who are often limited by the financial and technical constraints associated with actual market trials of new products are likely to find that the type of marketing research described here is a particularly cost-effective method of getting information to assess market potential.     

Consumer’s Preference and Willingness to Pay for Apple Attributes: A Choice Experiment in Large Retail Outlets in Bologna (Italy)

ABSTRACT

We analyze the relevant quality attributes of apples which drive and influence consumer choice in the city of Bologna (Italy). A hypothetical choice experiment was conducted to elicit Italian consumer’s willingness to pay for apple attributes and was included as a part of a questionnaire survey. A group of 301 consumers were surveyed in Bologna in July and August 2016. Data were analyzed using a multinomial logit model. Results suggest Italian consumers are willing to pay more for yellow apples and for apples harvested in Trentino-Alto Adige region, compared with other Italian areas. Furthermore, results highlight a preference for locally produced apples, whereas organic apples are only slightly preferred to the not organic alternative. Results of this study could be used to develop marketing strategies for apple differentiation or for a new product development and target the right product to the right consumer.