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A Calibrate Auction-conjoint Experiment to Elicit Consumer Valuation of Sustainable Farming: Is Agro-systems Preservation Relevant?

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  • Avitia, Jessica
  • Costa-Font, Montserrat
  • Gil, Jose Maria
  • Lusk, Jayson L.

Abstract

This paper analyses the role of agro-systems preservation on making food choices. It employs the “Calibrate Auction-Conjoint Valuation method” (CACM), which relates hypothetical conjoint valuation of product attributes with real market behavior using real economic incentives. The paper also allows comparing the hypothetical and nonhypothetical valuations in order to value the difference between the theoretic and the incentive-compatible WTP for a same respondent and within a single experiment. Thus the paper aims at testing for: 1) the internal consistency on people’s behavior towards sustainable agriculture, and 2) the relevance of the price attribute versus agro-ecosystems preservation for a fresh product. Results suggest that Spanish respondents’ valuation of an agricultural product highly depends on the type of system used for its production. Nevertheless, respondents mainly differ between sustainable and non sustainable production, and do not discriminate between organic and integrated systems. In addition, both the price and the protection of the environment are the most important elements taken into account when purchasing. Moreover, consumers tend to overestimate their WTP in hypothetical settings (60% of the sample). Finally, factors such as gender, respondents’ knowledge towards organic production and practices, health concerns, trust on organic marketing agents and risk perception are significant on explaining differences between individual’s hypothetical and non-hypothetical experiments.

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File URL: http://purl.umn.edu/114213
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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114213.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114213

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Keywords: Consumer/Household Economics; Environmental Economics and Policy;

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  1. Jay R. Corrigan & Dinah Pura T. Depositario & Rodolfo M. Nayga & Ximing Wu & Tiffany P. Laude, 2006. "Comparing Open-Ended Choice Experiments and Experimental Auctions: An Application to Golden Rice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(3), pages 837-853.
  2. repec:feb:artefa:0067 is not listed on IDEAS
  3. Maynard, Leigh J. & Hartell, Jason G. & Meyer, A. Lee & Hao, Jianqiang, 2004. "An experimental approach to valuing new differentiated products," Agricultural Economics, Blackwell, vol. 31(2-3), pages 317-325, December.
  4. Deacue Fields & Walt Prevatt, 2008. "An Incentive Compatible Conjoint Ranking Mechanism," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 487-498.
  5. Lusk Jayson L & Schroeder Ted C., 2006. "Auction Bids and Shopping Choices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-39, August.
  6. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
  7. Carlsson, Fredrik & Martinsson, Peter, 2001. "Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 179-192, March.
  8. Michaelidou, Nina & Hassan, Louise M., 2010. "Modeling the factors affecting rural consumers' purchase of organic and free-range produce: A case study of consumers' from the Island of Arran in Scotland, UK," Food Policy, Elsevier, vol. 35(2), pages 130-139, April.
  9. Hamilton, Stephen F. & Zilberman, David, 2006. "Green markets, eco-certification, and equilibrium fraud," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 627-644, November.
  10. Burton, Michael P. & Rigby, Dan & Young, Trevor & James, Sallie, 2002. "Consumer Attitudes to Genetically Modified Organisms in Food in the UK," 2002 Conference (46th), February 13-15, 2002, Canberra 125064, Australian Agricultural and Resource Economics Society.
  11. Jayson Lusk & T Schroeder, 2004. "Are choice experiments incentive compatible? A test with quality differentiated beef steaks," Artefactual Field Experiments 00096, The Field Experiments Website.
  12. Lusk,Jayson L. & Shogren,Jason F., 2007. "Experimental Auctions," Cambridge Books, Cambridge University Press, number 9780521671248, October.
  13. Lusk, Jayson L. & Pruitt, J.R. & Norwood, Bailey, 2006. "External validity of a framed field experiment," Economics Letters, Elsevier, vol. 93(2), pages 285-290, November.
  14. Norwood, F. Bailey & Lusk, Jayson L., 2011. "A calibrated auction-conjoint valuation method: Valuing pork and eggs produced under differing animal welfare conditions," Journal of Environmental Economics and Management, Elsevier, vol. 62(1), pages 80-94, July.
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