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Comparing Accuracy and Costs of Revealed and Stated Preferences: The Case of Consumer Acceptance of Yellow Maize in East Africa

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  • Kimenju, Simon Chege
  • De Groote, Hugo
  • Morawetz, Ulrich B.

Abstract

For quite a while, stated preferences have been a major tool to measure consumer preferences for new products and services. Revealed preference methods, in particular experimental economics, have gained popularity recently because they have been shown to be more incentive compatible, and therefore more accurate. However, this advantage comes at the expense of higher survey costs. In the developing countries with limited funding for research, it is important to determine whether the extra cost can be justified by the extra gain in accuracy. A survey of 100 farmers was carried out in Western Kenya to determine consumer preference for yellow maize using the contingent valuation, choice experiments and experimental auction methods. Experimental auctions produced the most realistic results for mean willingness to pay. They are also the most accurate at all budget levels, but also the most expensive. Considering their accuracy and realistic results, we conclude that they should be the recommended method in measuring consumer preference in developing countries, since the extra cost is more than recovered by the gain in accuracy.

Suggested Citation

  • Kimenju, Simon Chege & De Groote, Hugo & Morawetz, Ulrich B., 2006. "Comparing Accuracy and Costs of Revealed and Stated Preferences: The Case of Consumer Acceptance of Yellow Maize in East Africa," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25642, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae06:25642
    DOI: 10.22004/ag.econ.25642
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    References listed on IDEAS

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    2. Lusk Jayson L & Alexander Corinne & Rousu Matthew C., 2007. "Designing Experimental Auctions for Marketing Research: The Effect of Values, Distributions, and Mechanisms on Incentives for Truthful Bidding," Review of Marketing Science, De Gruyter, vol. 5(1), pages 1-32, October.
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    Cited by:

    1. 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.
    2. Su, Lianfan & Adam, Brian D. & Lusk, Jayson L. & Arthur, Frank, 2017. "Anchoring, Information, and Fragility of Choice Experiments: An Application to Consumer Willingness to Pay for Rice with Improved Storage Management," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 42(2), May.

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