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Concerns for Fairness and Preferences for Organic Food

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  • Chang, Jae Bong
  • Lusk, Jayson L.

Abstract

Recent findings from behavioral economics suggest people are concerned about the fairness and inequality in simple distribution experiments. This study sought to determine whether such considerations also carry over to food choice. A conjoint-type experiment was developed and administered to a random sample of the U.S. population via mail survey to determine whether consumers, when purchasing food products, are concerned about the distribution of benefits across the participants in the agricultural supply chain (small farmers, large farmers, agribusiness, supermarkets, and the consumer) and to determine the extent to which the fairness models proposed in the general economics literature (and variants on these models) explain food choice. Results indicate that, aside from themselves, people prefer small farmers to receive the largest benefit from food purchase. The inequality aversion models proposed in the general economics literature do not exhibit much explanatory power, unless modified in non-trivial ways to fit the context of food. Finally, we find that preferences for distribution of benefits, along with measured beliefs about the relative distribution of benefits accruing to producers of organic and conventional foods, is a significant factor explaining consumer willingness-to-pay a premium for organic food.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6414.

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Date of creation: 2008
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Handle: RePEc:ags:aaea08:6414

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Keywords: Food Consumption/Nutrition/Food Safety;

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  1. Norwood, F. Bailey & Lusk, Jayson L. & Brorsen, B. Wade, 2004. "Model Selection for Discrete Dependent Variables: Better Statistics for Better Steaks," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.
  2. Charness, Gary B & Rabin, Matthew, 2001. "Understanding Social Preferences With Simple Tests," University of California at Santa Barbara, Economics Working Paper Series qt0dc3k4m5, Department of Economics, UC Santa Barbara.
  3. Blinder, Alan S & Choi, Don H, 1990. "A Shred of Evidence on Theories of Wage Stickiness," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 1003-15, November.
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  6. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August.
  7. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 818-860, June.
  8. John A. List, 2006. "The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 1-37, February.
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  11. Grebitus, Carola & Yue, Chengyan & Bruhn, Maike & Jensen, Helen H., 2007. "What Affects Consumption Patterns of Organic and Conventional Products?," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9819, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  12. Zepeda, Lydia & Li, Jinghan, 2007. "Characteristics of Organic Food Shoppers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(01), April.
  13. Durham, Catherine A. & Andrade, Diego, 2005. "Health vs. Environmental Motivation in Organic Preferences and Purchases," 2005 Annual meeting, July 24-27, Providence, RI 19221, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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