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Consumer preferences for fair labour certification

Author

Listed:
  • Andreas C. Drichoutis
  • Achilleas Vassilopoulos
  • Jayson L. Lusk
  • Rodolfo M. NaygaJr.

Abstract

High-profile cases of exploitative labour practices have increased concerns over agricultural working conditions. However, it is unclear to what extent the public is willing to trade-off fair working conditions for higher prices. We implement a large-scale survey in Greece to uncover consumer preferences for a food labelling system that certifies fair working conditions for the workers employed in agricultural production. With our most conservative estimates, we find that consumers are willing to pay an average premium of 53 cents of a Euro per 500 g, 95 per cent CI [43.9, 62.3], for strawberries with fair labour certification. This result suggests that consumers do value the better treatment of workers in the agricultural sector. It also suggests that there is a current market failure, created by the asymmetry of information between consumers and producers, that can be the basis of discussion for alternative labelling schemes involving fair labour labels. We also tested a number of known biases associated with consumer behaviour or the contingent valuation method and found the positive willingness-to-pay result to be robust.

Suggested Citation

  • Andreas C. Drichoutis & Achilleas Vassilopoulos & Jayson L. Lusk & Rodolfo M. NaygaJr., 2017. "Consumer preferences for fair labour certification," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(3), pages 455-474.
    • Handle: RePEc:oup:erevae:v:44:y:2017:i:3:p:455-474.
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    File URL: http://hdl.handle.net/10.1093/erae/jbx002
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    Cited by:

    1. Stavroula Tsigou & Stathis Klonaris, 2018. "Factors affecting farmers’ WTP for innovative fertilizer against soil salinity," Working Papers 2018-3, Agricultural University of Athens, Department Of Agricultural Economics.
    2. Frondel Manuel & Sommer Stephan & Tomberg Lukas, 2019. "Versorgungssicherheit mit Strom: Empirische Evidenz auf Basis der Inferred-Valuation-Methode," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 68(1), pages 53-73, May.
    3. Lehberger, Mira & Grüner, Sven, 2021. "Consumers’ willingness to pay for plants protected by beneficial insects – Evidence from two stated-choice experiments with different subject pools," Food Policy, Elsevier, vol. 102(C).
    4. Wenjing Nie & David Abler & Liqun Zhu & Taiping Li & Guanghua Lin, 2018. "Consumer Preferences and Welfare Evaluation under Current Food Inspection Measures in China: Evidence from Real Experiment Choice of Rice Labels," Sustainability, MDPI, vol. 10(11), pages 1-15, November.
    5. Moon, DongWhoi & Wang, H. Holly & Hao, Na, 2023. "Consumer behavior in choosing microplastic contaminated seafood across different countries: The role of cultural and attitudinal factors," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 290-306.
    6. Zawojska, Ewa & Bartczak, Anna & Czajkowski, Mikołaj, 2019. "Disentangling the effects of policy and payment consequentiality and risk attitudes on stated preferences," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 63-84.
    7. Kalyuzhna, Julia & Pisarenko, Denis & Nesterenko, Sergey, 2018. "Стратегічне Управління Трудовими Ресурсами Аграрних Підприємств На Засадах Маркетингу," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 4(2), June.
    8. Frondel Manuel & Sommer Stephan & Tomberg Lukas, 2019. "Versorgungssicherheit mit Strom: Empirische Evidenz auf Basis der Inferred-Valuation-Methode," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 68(1), pages 53-73, May.
    9. Giotis, Thomas & Drichoutis, Andreas C., 2020. "Consumer acceptance and willingness-to-pay for insect-based foods: The role of proximity of insects in the food chain," MPRA Paper 104840, University Library of Munich, Germany.
    10. Giovanna Piracci & Fabio Boncinelli & Leonardo Casini, 2022. "Wine consumers' demand for social sustainability labeling: Evidence for the fair labor claim," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(4), pages 1742-1761, December.
    11. Fabio Boncinelli & Francesca Gerini & Benedetta Neri & Leonardo Casini, 2018. "Consumer willingness to pay for non‐mandatory indication of the fish catch zone," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 728-741, October.
    12. Menapace, Luisa & Raffaelli, Roberta, 2020. "Unraveling hypothetical bias in discrete choice experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 416-430.
    13. Kaminski, Danielle M. & Caputo, Vincenzina & McKendree, Melissa G.S., . "The US Public’s Attitudes on Animal and Worker Welfare in the Dairy and Poultry Industries," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 49(1).
    14. Zawojska, Ewa & Gastineau, Pascal & Mahieu, Pierre-Alexandre & Cheze, Benoit & Paris, Anthony, 2021. "Measuring policy consequentiality perceptions in stated preference surveys," 2021 Annual Meeting, August 1-3, Austin, Texas 313977, Agricultural and Applied Economics Association.
    15. Kaminski, Danielle M. & Caputo, Vincenzina, 2018. "Milk Produced Under Certified Labor Conditions: Are U.S. Consumers Willing to Pay for It and Does Prior Information Impact Their Behavior?," 2018 Annual Meeting, August 5-7, Washington, D.C. 274041, Agricultural and Applied Economics Association.
    16. Qiujie Zheng & H. Holly Wang & Yonggang Lu, 2018. "Consumer Purchase Intentions for Sustainable Wild Salmon in the Chinese Market and Implications for Agribusiness Decisions," Sustainability, MDPI, vol. 10(5), pages 1-16, April.
    17. Maurizio Canavari & Andreas C. Drichoutis & Jayson L. Lusk & Rodolfo M. Nayga, Jr., 2018. "How to run an experimental auction: A review of recent advances," Working Papers 2018-5, Agricultural University of Athens, Department Of Agricultural Economics.
    18. Tsigkou, Stavroula & Klonaris, Stathis, 2020. "Eliciting Farmers' Willingness to Pay for Innovative Fertilizer Against Soil Salinity: Comparison of Two Methods in a Field Survey," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 9, December.
    19. Georgia Papoutsi & Pantelis Noulas & Katerina Tsatoura, 2022. "Animals or Humans: What Do Greek Consumers Care More about When Buying Feta Cheese?," Sustainability, MDPI, vol. 15(1), pages 1-14, December.
    20. Di Fang & Rodolfo M. Nayga & Grant H. West & Claudia Bazzani & Wei Yang & Benjamin C. Lok & Charles E. Levy & Heather A. Snell, 2021. "On the Use of Virtual Reality in Mitigating Hypothetical Bias in Choice Experiments," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 142-161, January.

    More about this item

    Keywords

    fair labour label; willingness-to-pay; equivalent loss; contingent valuation; inferred valuation; consequentiality; cheap talk; uncertainty scale;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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