Consumers' valuation of food quality labels: the case of the European geographic indication and organic farming labels

This paper assesses consumers' preferences and willingness to pay for European Union geographical indication quality labels [Protected Designation of Origin (PDO) and Protected Geographical Indications (PGI)], organic farming label and other product quality cues. Using a choice experiment, random parameter logit model and olive oil as product of interest, results suggest that respondents are willing to pay the highest premium price for a product with a PDO label, followed by organic farming label, a quality cue describing the product as extra‐virgin olive oil and then a PGI label.     

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.     

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.     

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.     

Consumer Preferences for ‘Localness’ and Organic Food Production

While organic food is based on well-defined production criteria, the criteria for ‘local’ food are less clear. This study investigates the preferences and trade-offs of distinct consumer segments relative to organic production and several dimensions of local food (sales channel, size of company, and geographical location of animals used in the production). The analysis is based on a quantitative survey of 505 Danish consumers and a choice experiment involving beef salami. Data were analyzed in a principal component and a latent class analysis. We identify five consumer segments whose preferences for organic and local product attributes differed substantially. Most respondents considered geographical proximity in the raising of cattle to be the most important attribute and a third of the consumers were willing to pay a premium for organic salami. The segmentation provides more detailed information about stated consumer behavior than what is typically elicited when considering only average consumer behavior.     

Are Consumers Willing to Pay for Local Chicken Breasts and Pork Chops?

Consumer definitions of and demand for locally produced meat were collected via an online survey of 625 U.S. residents. Consumer choice experiments were utilised to elicit willingness to pay for locally produced chicken breasts and pork chops. Younger respondents, respondents without a college degree, participants in hunting and fishing and those who have altered their total meat consumption in the past 3 years due to food safety or animal welfare concerns more frequently report that local food is produced within 10 or 20 miles of their home. Results indicate that respondents are willing to pay a positive amount (at the mean) for verified local production of chicken breasts but not pork chops.     

The Era of the Functional Consumer

A discrete choice experiment was conducted to analyze consumer preferences for fruit and vegetable attributes in the context of the 2010 MyPlate Dietary Guidelines for Americans recommendations and to consider the role of health benefits and potential tradeoffs among fruit and vegetable quantity and quality attributes. Higher willingness to pay for fruit and vegetable attributes by the medium-high income respondents compared to low-income respondents may reflect the reality of a greater ability to pay. The magnitude of WTP toward satisfying MyPlate recommendations is substantially below the cost; therefore, it is not surprising that current consumption levels are well below the recommendation. Organic products had a stigmatizing effect for low-income respondents.     

Consumer Heterogeneity in the Willingness to Pay for Local and Organic Food

Due to growth and changing distribution channels for organic food in Germany, there is some concern that organic food is losing authenticity. Contrarily, local food production is seen as a new trend and is gaining market share. This article analyzes whether those alternative concepts of organic and local food production rather support or threaten each other in consumers’ choice. Results of a Bavarian survey, including a choice experiment for bread, beer, and milk on the attributes price, brand, local, and organic, are analyzed using a mixed logit model. Willingness-to-pay estimations confirm the importance of local production to the surveyed consumers, especially in interaction with organic production, leading to the conclusion that the two production methods can support each other in achieving price premiums. The estimated standard deviations show significant heterogeneity of the parameters for all three products for most attributes.     

Women,men and organic food: differences in their attitudes and willingness to pay. A Spanish case study

The main purpose of this work consists of displaying the different attitudes of men and women towards organic food, and their willingness to pay for it, in three different consumer intensities: usual, occasional and potential consumers. Several surveys have been carried out to obtain a representative sample of regular food purchasers living in Castilla‐La Mancha (Spain). Statistic analysis previously detecting significant differences with regard to gender and type of consumer has been conducted by univariate analysis to describe attitudes, and multivariate analysis, through ‘logit’ models, to calculate maximum willingness to pay. Results show that women have a more favourable attitude (directly related to their lifestyle) to the purchase and consumption of organic food than men, whereas men are inclined to pay a higher price for organic food than women. In general, men are disposed to pay a higher increase in price than women.     

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.     

Direct evidence of ending‐digit drop‐off in price information processing

Research has suggested that pricing products at one cent below a whole number (e.g., $4.99 instead of $5.00) can be an effective method for increasing purchases. Although many reasons for this have been suggested, a commonly proposed explanation is that consumers tend to drop off, or pay less attention to, the rightmost two digits. This drop‐off mechanism has garnered much indirect support, but only limited research has been conducted to directly test it. In this study, respondents provided estimates of how many products they could purchase for $73. Analyses indicated that respondents thought they could buy significantly more products priced with 99 endings than products with comparable 00‐ending prices. Follow‐up analyses showed that (a) errors made by respondents showed a pattern consistent with a dropoff mechanism, and (b) motivation to carefully provide quantity estimates moderated the effect. The study therefore provides rare direct evidence that the drop‐off mechanism may contribute to the effectiveness of 9‐ending pricing. © 2005 Wiley Periodicals, Inc.     

Modes of production in home maintenance: accounting for the choice between formality,off the books and self‐provisioning

Households depend on the existence of a home, and therefore, maintenance plays an important social and economic role. Formal outsourcing is often overestimated here and alternative modes, such as informal outsourcing and do‐it‐yourself (DIY), are overlooked. This paper estimates and accounts for the choice of one mode of production in Flemish households. First, the different modes of production are quantified according to two different methods. Further, an explanation of the choice made is constructed. The complexity of maintenance work has an impact as well as the dimensions of social and cultural capital. Factors such as dexterity, occupational acquaintance with maintenance work, social trust and social contacts play a role. Finally, a model of a sequence of decisions is tested. This ramification mechanism shows that the primary choice is formal commissioning or not, inspired by technical complexity. The second choice between off‐the‐books outsourcing and DIY is influenced by the capital resources of the households.     

Tradeoffs between sensory attributes and organic labels: the case of orange juice

Researchers have investigated the role of sensory attributes and organic labels on consumers’ preferences and perceptions of food, but few has examined whether sensory attributes are relevant for consumers who prefer organic food and the extent to which sensory attributes influence consumer's marginal willingness to pay for organic food. The objective of this study is to determine how sensory attributes and organic label work together to influence consumer's stated preference and marginal willingness to pay for orange juice. To achieve this, we conducted a blind sensory evaluation of two orange juices followed by a discrete choice experiment to determine the extent to which consumer's stated preference for orange juice labelled as organic is affected by sensory experience preceding the choice experiment. Random parameter logit models and latent class conditional logit models are used to explain stated preference. Results indicate that the effect of sensory attributes on consumer's marginal willingness to pay differed by organic juice and conventional juice.     

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.     

The Family's Financial Support as a “Poisoned Gift”: A Family Embeddedness Perspective on Entrepreneurial Intentions

We argue that greater availability of financial support by the family for creating a new venture entails stronger financial and non‐financial obligations. Cognizant of these obligations, potential founders anticipate negative performance implications for the planned firm and threats to the family system in the case of their non‐fulfillment. We thus postulate that the formation of actual entrepreneurial intentions is less likely the greater the available financial support. We confirm this by studying a sample of 23,304 respondents from 19 countries and find the negative relationship to be dependent on family cohesion and on individual entrepreneurial self‐efficacy.     

Warning labels on junk food: experimental evidence

Unhealthy food choice is one of the main causes of being overweight. Nutritionists blame a particular category of food: junk food. Several authors have proposed a fat tax for reducing the junk food demand, but others have demonstrated that these taxes must be very high in order to be effective. Therefore, a warning label about calorie content may be an alternative way to reduce the consumption of junk food. In this exploratory study, using students as respondents, a high‐calorie warning label is explored with an incentive compatible valuation method. The results indicate that a high‐calorie warning label has little effect on respondents’ choices, even when they have no prior familiarity with the food.     

The Impact of Information on Consumer Preferences for Different Animal Food Production Methods

The motivation for the present study is to understand food choice in relation to animal food production and to study how preferences are influenced by information. To do this, we carried out a choice experiment. In the analysis, we focus on chickens reared indoors and outdoors and chicken labelled campylobacter-free versus non-labelled chicken. The results suggest that there is a positive willingness to pay (WTP) both for chicken reared outdoors and for campylobacter-free labelled chicken. Information about rearing methods resulted in a higher WTP for chicken reared outdoors, while information about campylobacter had both positive and negative effects on respondents’ WTP. The highest increase in WTP for campylobacter-free labelled chicken was found for one of the high risk groups, individuals with poor kitchen hygiene.     

SHACKLE AND MODERN DECISION THEORY

The paper discusses the role of George L.S. Shackle in fostering an unconventional approach to individual decision making. Up until the early 1970s Shackle was the single critic of the probabilistic approach to decision making who proposed an alternative formal corpus for dealing with uncertainty. The main aim of the paper is to analyse Shackle's non‐probabilistic conceptualization of individual decisions under uncertainty from a specific viewpoint, namely that of a possible connection between his theory and one of the most interesting recent approaches to decision under uncertainty, the so‐called non‐additive probability approach of Gilboa and Schmeidler. The paper shows that these developments in modern decision theory take Shackle's issue seriously and confirm that the reliance of strict Bayesian theory on probabilistic judgements based on point‐probability estimates, a reliance that Shackle intended to oppose, is untenable. Non‐additive decision theory also provides a usage of non‐additive probability distributions in choice that is an alternative to Shackle's approach of using a qualitative notion of probability, such as potential surprise.     

Fashion interest as a driver for consumer textile waste management: reuse,recycle or disposal

Past studies have considered the impact of fashion on consumer textile disposal behaviour, but have focused mainly on drivers of clothing waste. There is a lack of research that examines consumer attitudes towards fashion and their disposal methods. This study conducted an online survey of 410 people in Ontario, Canada with varying demographic characteristics to assess how they currently manage their textile waste including resell, swap, take‐back, donation and disposal. Respondents were asked about their fashion interest and shopping frequency and were assigned a fashion index value. The fashion index value is not a means of grouping consumers but is instead a continuum to model interest in fashion, with one extreme representing fashion consumers and the other representing non‐fashion consumers. Statistical analysis was then used to establish whether there is a link between textile waste behaviour and fashion index. The results indicate that consumers with a high fashion index (i.e. fashion consumers) and consumers with low fashion index (i.e. non‐fashion consumers) manage their textile waste differently. While the majority of participants donate and dispose of unwanted clothes, fashion consumers are more interested and more likely to participate in alternative methods (e.g. resell, swap, and take back) for removing unwanted textiles. Although fashion consumers produce more textile waste than non‐fashion consumers, textile consumption cannot be directly equated with textile waste since fashion consumers were found to have a lower disposal rate than non‐fashion consumers (38 percent to 50 percent, respectively). The distinct disposal characteristics of fashion and non‐fashion consumers (i.e. interest and willingness to participate in alternative channels) allows strategies to be tailored accordingly so that the amount of waste going to landfill can be reduced.