Label performance and the willingness to pay for Fair Trade coffee: a cross‐national perspective

In this paper, we investigate how label information detailing the performance of the Fair Trade labelling programme with respect to coffee affect consumers' willingness to pay in the US and in Germany. We provide respondents (university students in the US and Germany) information regarding the hypothetical benefits of the Fair Trade coffee programme on its intended beneficiaries on the production side [the revenue gains to participating marginal farmers (scope of the programme)] and, using stated preference conjoint methods, test how this performance criterion relates to the willingness to pay for Fair Trade coffee. Our empirical results identify a ‘threshold’ property of performance‐based labels. In effect, the willingness‐to‐pay for performance‐based Fair Trade labelled coffee exhibits an inverted U shape in the sense that the willingness to pay is positively related to the scope of the programme, but only up to a critical level. Thereafter, the willingness to pay declines as the income gains to participating growers increase further. Interestingly, this inverted U property is exhibited by both the US and German respondents with different critical thresholds.     

Declining Distance Effects in International Trade: Some Country‐Level Evidence

Technical progress can be expected to reduce transport costs over time, yet most studies of bilateral trade based on the gravity model find distance effects to be increasing rather than decreasing. We investigate countries' openness to international trade (the ratio of exports plus imports to GDP). We find that trade decreases with geographical remoteness, land area and lack of access to the sea, all of which are likely to be correlated with transport costs. In contrast to the results obtained with log‐linear models of bilateral trade, distance effects (remoteness and land area) have declined over time. Trade decreases with population density and increases with improvements in the terms of trade, investment and a more liberal trade policy.     

Measuring consumer's willingness to pay for organic and Fair Trade products

Previous research has extensively studied consumer's environmental and social concerns. However, measuring the value of the environmental or social dimension of a product remains a challenge. This paper proposes to partially fill this gap by measuring the double ‘Fair Trade and organic’ labels' value using an experimental method – the Becker‐DeGroot‐Marschak's mechanism. Two ‘organic and Fair Trade’ and two conventional chocolate products were tested on a sample of 102 consumers. Results show that organic and Fair Trade labels increase consumers' willingness to pay, and allow the identification of three consumers clusters. The first cluster represents people insensitive to the label. For the second cluster, the ‘organic and Fair Trade’ labels' influence on the improving image of the products is positive and important. And finally, for the third cluster, the valuation of the ‘organic and Fair Trade’ label is determined by the product's taste. Our research contributes to a better understanding of consumers' valuation of Fair Trade and organic labels, leading to our conclusions, which offer managerial implications with respect to this market (importance of taste and usefulness of double labels).     

A Note on Impacts of International Trade on Economic Growth and Inflation

Results of this study indicate that short- and long-term effects of international trade on inflation, GDP, and inflation-adjusted GDP growth vary over periods with fixed or freely floating exchange rates or a big accumulated trade deficit. Causalities between trade and other macroeconomic variables are also different in different periods.

This study does not find supportive evidence that “phantom GDP gains” may significantly change impacts of imports on productivity, CPI, and inflation-adjusted GDP and causalities between imports and other macroeconomic variables, although a structural break is found in the relationship between imports and GDP at the beginning of 2003.     

Modelling the antecedents of consumers' willingness to pay for eco-labelled food products

The purpose of this paper is to model the antecedents of consumers' willingness to pay for eco-labelled food products. This research utilizes the Theory of Planned Behaviour to model the impact of consumers' awareness of eco-labels, environmental concerns, beliefs in the environmental ability of eco-labels, and presence of children on their willingness to pay for eco-labelled food products. This study uses structural equational modelling and PROCESS macros, to test the moderated mediation model on a sample of 333 online responses. Findings suggest the impact of consumers' environmental concerns and eco-label awareness on their willingness to pay for eco-labelled food products is partially mediated by consumers' belief in the environmental ability of these eco-labels. The relationship is further moderated by the presence of children living in the household. This study establishes the value of consumers' beliefs in the environmental ability of eco-labels and implies that communication strategies need to be carefully refined to provide consumers with more information about eco-labels and to emphasize the environmental ability of eco-labels utilized within the food industry as this can have an impact on their willingness to pay for these products, especially for consumers, who have children in the same household.     

Regionalism Within Multilateralism: The WTO Trade Policy Review of Canada

The World Trade Organisation published a Trade Policy Review of Canada in 2003. In this paper, we discuss the WTO Review and augment the discussion by presenting original data and reviewing the empirical literature. The WTO concludes that Canada's trade regime is open and transparent but maintains barriers in a few important sectors. We subject this claim to empirical scrutiny, comparing Canada's actual imports to a multilateral benchmark based on the gravity equation. We show that Canada imports about what should be expected given the size of its economy and its location. In a second benchmarking exercise, we show that Canada's anti‐dumping initiations are in proportion to its imports and that Canada's exports are targeted less by other countries’ anti‐dumping investigations than what might be expected based on Canadian export levels. Like many other countries, Canada has pursued trade liberalisation through the World Trade Organisation while simultaneously signing multiple regional trade agreements. Our summary of the recent literature indicates that Canada's regional trade agreements have generated more trade creation than trade diversion. Canada has also spurred imports from the least developed countries by unilaterally eliminating tariffs and quota barriers on 48 of the world's poorest countries in January 2003. We also discuss Canadian progress in opening its agriculture and clothing industries. Overall, we conclude that Canada appears committed to advancing globalisation through multilateral trade liberalisation supplemented by unilateral and bilateral initiatives.     

Trade Policy Issues in a Small African Economy: The Trade Policy Review of The Gambia 2004

The Gambia displays many of the classic characteristics of a small open economy, with the vulnerabilities that implies. The sum of its imports and exports are around 100 per cent of GDP, with a limited number of export commodities and a wide variety of imports, including some key staple foods. The Trade Policy Review of The Gambia 2004 provides a very helpful review and assessment of current trade patterns and policies. The latter rely predominantly on import and export taxes. While quite substantial trade reform measures have been implemented recently, these have led to only a very small reduction in the average tariff rate, and trade policy displays a substantial anti‐export bias. Other important issues highlighted by the Trade Policy Review include serious capacity constraints relating to trade policy, and a failure to discuss connections between trade policy and growth and poverty reduction – again common characteristics of many small economies.     

Negativity bias in consumer price response to ethical information

The increasing debate on corporate ethics raises the question of whether consumers are willing to reward and punish corporate behaviour based on its ethicality. In this context, this article investigates the direct effect on consumers' willingness to pay. Price response to product‐related ethical information is explored in an experiment dealing with social issues in sportswear and environmental issues in consumer electronics. It is shown that in both areas, consumers demonstrate an increased willingness to pay for ethically produced goods. However, the response is subject to a negativity bias. In contrast to prior research that used abstract stimulus measures, a ratio for quantifying this bias is suggested based on consumers' willingness to pay and their price expectations. This measure allows us to analyse a consumer's individual bias.     

The Macroeconomic Effects of the Canada–US Free Trade Agreement on Canada: A Counterfactual Analysis

We evaluate the macroeconomic effects of the Canada–US Free Trade Agreement (FTA) on Canada's economy using a counterfactual analysis. We exploit the dependence of GDP growth (labour productivity and unemployment, respectively) among different economic entities and construct the counterfactuals using data from countries other than Canada. We find that in the adjustment period from 1989:Q1 to 1992:Q1, Canada's economy bore the short‐run adjustment costs of the FTA with a decline of the annual real GDP by 2.56 per cent and a decline of the labour productivity by 0.62 per cent. After the adjustment period, the FTA had a positive and permanent effect of 1.86 per cent on Canada's annual real GDP growth and raised the labour productivity from 1992 to 1994 by 2.39 per cent on average. Moreover, the FTA increased Canada's annual unemployment rate by 1.81 per cent in the period 1989–94.     

Consumers' reaction to fair trade motivated price increases

Consumer perception of price increases and their reactions are a topic of great relevance for marketing research and practice. We investigate consumers' acceptance of price increases justified by higher costs due to company's corporate socially responsible activities by conducting two experimental studies. In the first study we examine perceived fairness and intentions following a price increase justified by a fair trade commitment. To assess the green attitude–behavior gap in consumer behavior our second study incorporates a real world experiment to explore actual consumer behavior against stated intentions. Our investigation adds nuance to our understanding of the effects of corporate social responsibility on consumer response to price increases. Our results reveal that a price increase due to a fair trade commitment is perceived as fair and does not have a negative impact on purchase behavior. We contrast our findings with a price increase due to higher taxes and due to profit increase. Our results demonstrate that fair trade justified price increases can skim twice the amount compared to tax justified increases. Furthermore, consumers' actual buying behavior reveals no difference to their stated intentions. Hence, prior research proclaiming an attitude–behavior gap in the context of consumers' socially responsible buying behavior has to be called into question.     

Analysis of consumers' willingness to pay for new food prepared from cowpea flour

Consumers' willingness to pay for cowpea products was analysed by a multi-ordered response model. The analysis indicated that sociodemographic factors are weakly linked to consumers' willingness to pay while product characteristics are strongly linked. Marketing promotion is possible. Thus, akara products, made from cowpea paste, have potential for extending the utilization of cowpeas.     

Moderating Price Sensitivity of Low-Uncertainty Daily Eco-Friendly Products: Creating Benevolence Trust and Reducing Uncertainties

For low-uncertainty daily eco-friendly products like eco-shampoo, consumers' willingness to pay a higher price can be the biggest barrier to hinder their purchase. In this research, we propose that benevolence trust does have a significant effect in mitigating this barrier. This research also shows that benevolence trust can reduce uncertainties and feelings of anxiety and increase feelings of optimism, symbolic benefits, and perceived price value while adopting daily eco-friendly products. Above all, the research findings show that further reduction of uncertainties plays a key role in driving consumers' willingness to pay a higher price when purchasing low-uncertainty daily eco-friendly products. The findings were also supported by a practical case study.     

A de-biased direct question approach to measuring consumers' willingness to pay

Knowledge of consumers' willingness to pay (WTP) is a prerequisite to profitable price-setting. To gauge consumers' WTP, practitioners often rely on a direct single question approach in which consumers are asked to explicitly state their WTP for a product. Despite its popularity among practitioners, this approach has been found to suffer from hypothetical bias. In this paper, we propose a rigorous method that improves the accuracy of the direct single question approach. Specifically, we systematically assess the hypothetical biases associated with the direct single question approach and explore ways to de-bias it. Our results show that by using the de-biasing procedures we propose, we can generate a de-biased direct single question approach that is accurate enough to be useful for managerial decision-making. We validate this approach with two studies in this paper.     

Does Taste Beat Food Safety? Evidence From the “Pêra Rocha” Case in Portugal

Nowadays, fresh fruits such as pears are differentiated by cultivars, origins, and appearances, as well as by companies' production and processing methods. We may now observe many denominations of origin, retailers,' and private labels in order to signal the differentiation to the consumers, who are often willing to pay large price premiums for products with specific attributes. In this article, we used an experimental auction to assess how information on quality attributes affects consumers' willingness to pay for different types of pears. The main results show that information on the products' characteristics related to food safety instantly influences consumers' willingness to pay. However, it appears that in the end, sensory intrinsic attributes related to taste beat the guarantee of food safety in driving the buying behaviour.     

Turkey: Trade Policy Review

The purpose of the paper is to discuss the main issues highlighted in the Trade Policy Review: Turkey 2003. The paper studies first the main developments in Turkey's trade regime and trade performance. Next it discusses Turkish trade policy emphasising the measures affecting imports, exports and foreign direct investment. The paper points out that agriculture is highly protected, and that autonomous reforms have been implemented in some of the services sectors of the economy. Since joining the EU will require Turkey to adopt and implement the whole body of EU legislation – the acquis communautaire– in all areas, Turkey needs to liberalise its agricultural and services sectors further. Finally, the paper discusses an issue that has largely been neglected in Trade Policy Reviews. It is the sustainability of current account. The paper stresses that Turkey needs to pay close attention to the sustainability of the current account.     

2018 WTO Trade Policy Review of Malaysia

This paper presents an academic analysis and review of the recently completed WTO Trade Policy Review (TPR) of Malaysia, 2018. This includes suggesting policies that can help to promote Malaysia's international competitiveness. We show that the sharp decline in commodity prices that started in 2014 contributed in narrowing Malaysia's trade balance and current account balance as a share of GDP. The faster decline of exports as a share of GDP compared to imports accounted for most of the substantial reduction. Further, the collapse of commodity prices was accompanied by a sharp depreciation of Ringgit Malaysia. We also show that Malaysia is losing international attractiveness in terms of FDI inflows relative to its economic size. This is evidenced by the downward trend in Malaysia's FDI performance index since 1992. Further, international tourism has fallen on average since 2014, due largely to a drop in tourist arrivals from Singapore. Policymakers should introduce policies to enhance international competitiveness, such as reforming the education system to produce skilled workers and reducing reliance on low‐skilled foreign workers.     

Key influencing factors of green vegetable consumption in Beijing,China

Green-certified vegetables are nutritious, attractive to the senses, and in line with the principles of sustainable development. The objectives of this study are to reveal the mechanism of green-certified vegetable consumption; that is, to explore the key influencing factors behind consumers' purchase intentions, purchase behavior, and willingness to pay for green-certified vegetables. Based on the Theory of Multi-attribute Attitudes and the Theory of Planned Behavior, a research framework of the consumption mechanism oriented to consumers' preferences regarding green-certified vegetable quality was established. By collecting 520 questionnaires from Beijing, China, the model was confirmed by the ordered logistic regression and interval linear regression method. The results showed that consumers have heterogeneous quality preferences, and their purchase intentions and purchase behavior levels are relatively high, with an average willingness to pay (WTP) of 138.58%. The key influencing factors driving consumers' purchase intentions, purchase behavior, and WTP include protein content belief, mineral content belief, vitamin content belief, organic vegetable safety belief, freshness belief, and taste belief. In addition, color belief and packaging quality belief significantly influenced consumers' WTP, while origin reputation belief and brand reputation belief significantly influenced consumers' purchase intention and purchase behavior. The findings of this study can guide the supply side of green-certified vegetables to improve product quality according to consumer demand, so as to promote the sustainable development of green-certified vegetables.     

New Evidence on the Export‐led Growth Nexus: A Case Study of Malaysia

This paper revisits the highly debated export‐led growth hypothesis in a number of different ways using Malaysia as a case study. First, the hypothesis is tested in terms of labour and total factor productivity growth as a potential channel via which exports can affect or be affected by GDP growth. Considering the impact of imports on GDP and productivity growth serves a similar purpose. In addition, GDP is trade‐adjusted to avoid the double‐counting problem arising from the national income identity. Second, the relationships are examined using the relatively recent Toda and Yamamoto (1995 ) causality tests. These results have major implications and are necessary to reassess the effectiveness of trade policy as a strategy for economic development.     

Possible Dynamic Effects of AFTA for the New Member Countries

We discuss the possible dynamic benefits of economic integration for the new members of ASEAN. Direct evidence on regional integration and growth is weak, but three indirect channels are possible. Openness increases access to foreign knowledge, which could help productivity growth. Trade liberalisation is likely to stimulate investment and might promote the integration of the regional production network. Binding liberalisation under AFTA would help ‘lock‐in’ and accelerate liberal economic reforms. These gains are not automatic, however. Discriminatory liberalisation will switch imports from sources with high stocks of knowledge towards ASEAN countries, which have lower stocks, and so may lower productivity growth. We term this ‘dynamic’ trade diversion. In addition, local absorptive capabilities must be developed to benefit fully from technology transfer. Finally, we recommend extending AFTA commitments on an MFN basis in order to avoid static and dynamic trade diversions.     

Bilateral ‘WTO‐Plus’ Free Trade Agreements: The WTO Trade Policy Review of Singapore 2004

The World Trade Organisation's 2004 Trade Policy Review of Singapore (WTO‐TPR Singapore 2004) depicts the small and outward‐oriented economy as one of the most open countries to international trade and investment. The review highlights the benefits of the outward‐oriented strategy that has enabled the Singapore economy to weather recent external shocks such as the Asian financial crisis to the SARS and to the recent unfavourable conditions in the Middle East. In particular, the report commended Singapore's efforts on its liberalisation of the services sector and its economic benefits to consumers and global trade. However, the WTO‐TPR Singapore 2004 highlights several key areas of concerns: (a) the commitment to multilateral agreements with the rising number of bilateral free trade agreements signed by Singapore and (b) the lack of growth of total factor productivity, a key indicator for long‐run efficiency of the economy. The paper addresses the above key concerns raised in the WTO's TPR of Singapore in terms of its commitment to global trade in terms of WTO‐plus bilateral FTAs, which intends to support a multilateral trading system, and its overall industrial strategies to raise its competitiveness.