Comparing Accuracy and Costs of Revealed and Stated Preferences: The Case of Consumer Acceptance of Yellow Maize in East Africa
AbstractFor 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.
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Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25642.
Date of creation: 2006
Date of revision:
Kenya; maize; consumer; experimental auctions; stated preference; WTP; Crop Production/Industries; Food Consumption/Nutrition/Food Safety; D6; Q12;
Find related papers by JEL classification:
- D6 - Microeconomics - - Welfare Economics
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
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