A comparison of importance weights and willingness-to-pay measures derived from choice-based conjoint, constant sum scales and best–worst scaling

We review the measurement of product attribute importance, and find little consensus in definition or measurement methods. We compare four measurement methods: 1) two direct methods whereby respondents report the importance of attributes using best–worst scaling or constant sum scales, and 2) two indirect methods derived from discrete choice experiments. Our comparisons rely on previous findings that choice experiments are externally valid to use as the standard. We find high agreement within direct or indirect methods, but less agreement between direct and indirect methods. Our results also demonstrate that inferences derived from indirect measures appear to be susceptible to context effects related to the particular attributes a researcher chooses to investigate. We discuss implications for current and future research.     

Predicting Consumers' Acceptability of Pesticide-Free Fresh Produce in Canada's Maritime Provinces

ABSTRACT

This study examines consumers' willingness to purchase pesticide-free fresh produce (PFFP) in Canada's Maritime Provinces. Households' decisions in purchasing organic foods are reflected in their willingness-to-pay (WTP) a premium for obtaining these types of products. WTP was modeled as a function of a series of explanatory variables including sociodemographic, socioeconomic, media, and public awareness about the impact of pesticide use on health and environment. Results suggest that Maritimes' consumers tend to pay the premium because they believe that the use of pesticide in conventional farming is life threatening. In addition, males and individuals with bachelor degrees are more willing to pay the premium, but those who visit farmers' markets on a regular basis are less likely to pay a premium for pesticide-free fresh fruit and vegetables. Finally, results show that media have no impact on consumers' decisions to purchase pesticide-free fresh produce.     

Consumers’ willingness-to-pay for organic conversion-grade food: Evidence from five EU countries

In recent years, in overall value, the EU has become a net importer of organic food to supply increasing demand. Financial support for farmers during the conversion period has been made to help expand organic production as this was seen as a barrier to conversion. Meanwhile, farmers have been marketing products produced in this conversion period and labelled as such, the extent to which is described here for the UK, Portugal, Denmark, Ireland and Italy. Consumers’ attitudes towards, and willingness-to-pay for, conversion-grade food in these countries is examined. It was found that consumers would be prepared to pay a premium for conversion-grade produce of around half the premium for organic produce with vegetables attracting a higher premium than meat. Finally, the potential of policies for marketing conversion-grade products to encourage more conversion is examined, together with barriers to achieving this. It is concluded that barriers to marketing such products, particularly from retailers, will be formidable. Thus, alternative policies are suggested.     

Modeling heterogeneity in consumer preferences for select food safety attributes in China

Food safety issues often arise from asymmetric information between consumers and suppliers with regards to product-specific attributes. Severe food safety scandals were observed recently in China. These events not only caused direct economic and life losses, but also created distrust in the Chinese food system domestically, as well as internationally. While much attention has focused on the problems plaguing the Chinese government’s food inspection system, little research has been dedicated to analyzing Chinese consumers’ concerns surrounding food safety. In this paper, we measure consumer preferences for select food safety attributes in pork and take food safety risk perceptions into account. Several choice experiment models, including latent class and random parameters logit, are constructed to capture heterogeneity in consumer preferences. Our results suggest that Chinese consumers have the highest willingness-to-pay for a government certification program, followed by third-party certification, a traceability system, and a product-specific information label. The results of this study call for the direct involvement of the Chinese government in the food safety system. A stricter monitoring system will not only improve consumer well-being in the short-run, but also restore consumers’ trust leading to a social welfare increase in the long run.     

The Role of the Beneficiary in Willingness to Pay for Socially Responsible Products: A Meta-analysis

Many companies have made significant investments in socially responsible production practices for their products. Environmentally safe cleaning products, fair trade coffee, and sustainable seafood are just a few examples. In this paper, we conduct a meta-analysis of over 80 published and unpublished research papers across a large number of product categories to better understand differences in willingness to pay (WTP) for socially responsible products. In particular, we are interested in whether the beneficiary of the social responsibility program—humans, animals, or the environment—affects WTP. We use two dependent variables: the percentage premium people are willing to pay and the proportion of respondents who are willing to pay a positive premium. We find that the mean percentage premium is 16.8 percent and that, on average, 60 percent of respondents are willing to pay a positive premium. Importantly, across both dependent measures, we find that WTP is greater for products where the socially responsible element benefits humans (e.g., labor practices) compared to those that benefit the environment. Implications for retailers, manufacturers, and future research are discussed.     

Which types of product attributes lead to aviation voluntary carbon offsetting among air passengers?

Tourism contributes 8% to global carbon emissions. Yet, only 10% of air passengers purchase voluntary carbon offsets. We test the effectiveness of different communication messages to increase voluntary purchasing of carbon offsets by air passengers. Results of a discrete choice experiment indicate that air passengers prefer carbon offset schemes that fund local programs (as opposed to international programs), that are effective in mitigating emissions, and are accredited. The ability to choose the specific offsetting program to be funded is not important. The willingness-to-pay for carbon offsets when booking for a group is lower than when booking an individual flight for oneself. Three market segments with distinct preferences exists. Segments also differ in key personal characteristics, including age, employment status, frequent flyer membership, and flight behaviour, making them actionable target segments for aviation carbon offsetting.     

Fairness and food choice

Although experimental studies have reported a wide array of other-regarding behavior, the pervasiveness of such behavior in the field is an open question. Using a stated-preference experiment, we first estimate people’s preferences, when purchasing food products, for the distribution of benefits accruing to participants in the food supply chain. Although none of the existing fairness models exhibit much predictive power, we find that people are in-fact concerned about the distribution of benefits resulting from food purchases, and that modifications to the models to fit the food context significantly improves explanatory power. Finally, we find that the measured preferences, along with elicited beliefs are significant predictors of people’s willingness-to-pay a premium for organic food.     

An econometric analysis of willingness-to-pay for sustainable development: A case study of the Vol?ji Potok landscape area

When the market for a certain good is competitive enough, economic activities can be studied by the market pricing mechanism. Because this is usually not feasible in case of environmental goods with embodied natural and cultural heritage, particular methods for economic valuation of such goods have to be applied. The present article represents the economic valuation of the Landscape Development and Protection Area of Vol?ji Potok, which is an important Slovenian cultural landscape area with internationally recognized qualities. For this purpose we combined classical contingent valuation with a closed-version of discrete choice method, where the protest responses have been removed. By using econometric analysis we obtained the value of willingness-to-pay and established its determinants. We also made an attempt to control for different biases that arise in such analyses. At last, we used the adjusted average individual value of willingness-to-pay to calculate the aggregate willingness-to-pay. The present analysis represents one of the very few applications of the method to Central and Eastern European countries.     

BayesRec: Personalize search ranking with customer attribute-level willingness-to-pay using heterogeneous booking choice data

The ongoing travel restrictions owing to the COVID-19 shutdown continue to impact the hospitality sector. This pause on travel has led to a bigger regime shift in the customer's preferences for hotel selection. Therefore, this study aims to help understand customers’ evolving preferences by assessing the customers’ attribute-level willingness-to-pay (WTP) to tailor the booking experience. Furthermore, the study accounts for customers’ behavioral heterogeneity and decision choices while estimating WTP. The proposed approach utilizes multi-stage online modeling: (i) Segmentation to create behavioral customer cohorts; (ii) Hierarchical Bayesian modeling to estimate customer-level WTP; and (iii) Multi-criteria decision optimization to rank-optimize the hotel alternatives by leveraging the assessed attribute-level WTP. This continuous assessment provides personalized hotel recommendations and enhances customer’s booking experience, thereby allowing hotels to accelerate revenue recovery and aid in proactive demand generation for the next wave of travelers in a post-COVID economy.     

Value of parsimonious nutritional information in a framed field experiment

This study investigates consumers’ beliefs about the tastiness and healthiness of 173 food items in a framed field experiment designed to mirror a grocery shopping environment. Using data collected from 129 food shoppers in Grenoble, France, demand models are estimated to determine how product choice is affected by price, taste, and perceived healthiness, and how choices change with the provision of objective health information. Unlike previous studies focusing on relatively complex nutrition labels, we elicit and convey health information using simple nutritional indices meant to lower search and cognitive processing costs. The results indicate that consumers are willing to pay for tastier foods and for healthier foods, particularly if the consumers have objective information (as opposed to perceived, subjective information) on nutrient content. The estimates suggest that the value of the type of nutritional information provided in the experiment is €0.98 per day. The figure refers to the daily welfare benefits that arise from being able to make a set of choices that better reflect people’s preferences by receiving the nutrient index information on all 173 food items versus not having such information.