The Value of Collective Reputation for Environmentally-Friendly Production Methods: The Case of Val di Gresta
AbstractIn this paper we investigate consumers' preferences for various environment-friendly production systems for carrots. We use discrete-choice multi-attribute stated-preference data to explore the effect of collective reputations from growers of an Alpine valley known for its environment-friendly production: Val di Gresta 'the valley of organic orchards'. Data analysis of the panel of discrete responses identifies unobserved taste heterogeneity for organic, bio-dynamic and place of origin, while observed heterogeneity for income is addressed by a piece-wise linear function. The implied sample distributions of individual-specific WTP for each of these random attributes are then compared. Results indicate that Integrated Pest Management is preferred to biodynamic as an emerging method. The presence of a premium for Val di Gresta produce is confirmed. The use of an experimental design to identify the relevant second order effects reveals the presence of a reputation effect which can be decomposed into a generic effect from place of origin and a specific one for each EFPMs. Farmers operating in geographically limited marginal areas, such as mountain valleys, may find it useful to invest in collective reputation through high quality standard to achieve higher returns. This strategy may compensate for the dwindling public support to farm income from EU programmes.
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Bibliographic InfoArticle provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.
Volume (Year): 5 (2007)
Issue (Month): 1 (September)
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Web page: http://www.degruyter.com
Other versions of this item:
- Ricardo Scarpa & Mara Thiene & Francesco Marangon, 2007. "The Value of Collective Reputation for Environmentally Friendly Production Methods: The Case of Val di Gresta," Working Papers in Economics 07/11, University of Waikato, Department of Economics.
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
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