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Are Stated Preferences Good Predictors of Market Behavior?

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  • Maria L. Loureiro
  • Jill J. McCluskey
  • Ron C. Mittelhammer

Abstract

Using an economic experiment in conjunction with a survey, we analyze whether consumers’ hypothetical willingness-to-pay responses are effective predictors of actual market behavior. We model revealed preferences as a function of socio-demographic characteristics and instrumental variables that represent the intensity of stated preferences. Our findings show that consumers who state that they are willing to pay a premium, which is equal to or greater than a positive lower bound, have a higher likelihood of actually buying the product in question. This implies that consumers’ actions in the economic experiment validate their survey responses.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 79 (2003)
Issue (Month): 1 ()
Pages: 44-45

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Handle: RePEc:uwp:landec:v:79:y:2003:i:1:p:44-45

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Web page: http://le.uwpress.org/

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Cited by:
  1. Douadia Bougherara & Gilles Grolleau, 2005. "Designing ecolabels in order to mitigate market failures: an application to agrofood products," Working Papers 156718, Institut National de la Recherche Agronomique, France.
  2. Robert Bartels & Denzil Fiebig & Arthur Soest, 2006. "Consumers and experts: an econometric analysis of the demand for water heaters," Empirical Economics, Springer, vol. 31(2), pages 369-391, June.
  3. Christopher A. Wolf & Frank Lupi & Stephen Harsh, 2011. "Farmer demand for financial record-keeping system attributes," Agricultural Finance Review, Emerald Group Publishing, vol. 71(2), pages 259-276, July.
  4. McCluskey, Jill J. & Grimsrud, Kristine M. & Ouchi, Hiromi & Wahl, Thomas I., 2005. "Bovine spongiform encephalopathy in Japan: consumers’ food safety perceptions and willingness to pay for tested beef," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(2), June.
  5. Wolf, Christopher A. & Tonsor, Glynn T. & Olynk, Nicole J., 2011. "Understanding U.S. Consumer Demand for Milk Production Attributes," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), August.
  6. Lusk, Jayson L. & Rozan, Anne, 2008. "Public Policy and Endogenous Beliefs: The Case of Genetically Modified Food," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(2), August.
  7. Lagerkvist, Carl Johan & Hess, Sebastian & Ngigi, Marther W. & Okello, Julius Juma, 2011. "Consumers’ Willingness to Pay for Food Safety in Nairobi: The Case of Fresh Vegetables," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114409, European Association of Agricultural Economists.
  8. Ifft, Jennifer & Roland-Holst, David W. & Zilberman, David, 2009. "Valuation of Safety-Branded and Traceable Free Range Chicken in Ha Noi: Results from a Field Experiment," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49444, Agricultural and Applied Economics Association.
  9. Jayson L. Lusk & F. Bailey Norwood & J. Ross Pruitt, 2006. "Consumer Demand for a Ban on Antibiotic Drug Use in Pork Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1015-1033.
  10. Czap, Natalia V. & Czap, Hans J., 2010. "An experimental investigation of revealed environmental concern," Ecological Economics, Elsevier, vol. 69(10), pages 2033-2041, August.
  11. Fogliatto, Flavio S. & da Silveira, Giovani J.C., 2008. "Mass customization: A method for market segmentation and choice menu design," International Journal of Production Economics, Elsevier, vol. 111(2), pages 606-622, February.
  12. Kirsten, Johann F. & Vermeulen, Hester & Van Zyl, Karlien & Du Randt, Gerrie & Du Plessis, H. & Weissnar, Tessa, 2012. "The economic potential for an origin based marketing and certification system for a meat product in South Africa: Perceptions, preferences, and experiments," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125764, International Association of Agricultural Economists.
  13. Li, Minghao & Wang, Qingbin & Kolodinsky, Jane M., 2012. "Estimating the Optimal Premium Rates for Credential Food Attributes: A Case Study in the Northeast United States," Journal of Food Distribution Research, Food Distribution Research Society, vol. 43(2), July.
  14. McCluskey, Jill J. & Loureiro, Maria L., 2003. "Consumer Preferences And Willingness To Pay For Food Labeling: A Discussion Of Empirical Studies," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(03), November.
  15. Thuriane Mahé, 2010. "Are Stated Preferences Confirmed by Purchasing Behaviours? The Case of Fair Trade-Certified Bananas in Switzerland," Journal of Business Ethics, Springer, vol. 92(2), pages 301-315, April.

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