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Discounting Spotted Apples: Investigating Consumers’ Willingness to Accept Cosmetic Damage in an Organic Product

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Author Info
Yue, Chengyan
Alfnes, Frode
Jensen, Helen H.

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Abstract

Organic producers have limited methods of avoiding plant diseases that result in cosmetic damage to produce. Therefore, the appearance of organic produce is often less than perfect. We use an experimental auction to investigate how cosmetic damage affects consumers’ willingness to pay for organic apples. We find that 75% of the participants are willing to pay more for organic than for conventional apples given identical appearance. However, at the first sight of any imperfection in the appearance of the organic apples, this segment is significantly reduced. Furthermore, we find that there is a significant effect of interaction between cosmetic damage and product methods. Even though most consumers say they buy organic products to avoid pesticides, we find that cosmetic damage has a larger impact on the willingness to pay for organic apples than for conventional apples.

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Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12693.

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Date of creation: 06 Nov 2006
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Publication status: Forthcoming in Journal of Agricultural and Applied Economics
Handle: RePEc:isu:genres:12693

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Web page: http://www.econ.iastate.edu
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Related research
Keywords: appearance; apples; experimental auctions; organic; willingness to pay.;

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Find related papers by JEL classification:
Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Roosen, Jutta & Fox, John A. & Hennessy, David A. & Schreiber, Alan, 1998. "Consumers' Valuation Of Insecticide Use Restrictions: An Application To Apples," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(02), December. [Downloadable!]
  2. Wendy J. Umberger & Dillon M. Feuz, 2004. "The Usefulness of Experimental Auctions in Determining Consumers' Willingness-to-Pay for Quality-Differentiated Products," Review of Agricultural Economics, American Agricultural Economics Association, vol. 26(2), pages 170-185, 06. [Downloadable!] (restricted)
  3. Baker, Gregory A., 1999. "Consumer Preferences For Food Safety Attributes In Fresh Apples: Market Segments, Consumer Characteristics, And Marketing Opportunities," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(01), July. [Downloadable!]
  4. repec:cup:cbooks:9780521855167 is not listed on IDEAS
  5. J.L. Lusk & T. Feldkamp & T.C. Schroeder, 2004. "Experimental Auction Procedure: Impact on Valuation of Quality Differentiated Goods," Artefactual Field Experiments 0069, The Field Experiments Website. [Downloadable!]
    Other versions:
  6. repec:cup:cbooks:9780521671248 is not listed on IDEAS
  7. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law & Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
  8. Loureiro, Maria L. & McCluskey, Jill J. & Mittelhammer, Ron C., 2001. "Assessing Consumer Preferences For Organic, Eco-Labeled, And Regular Apples," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(02), December. [Downloadable!]
  9. Frode Alfnes & Atle G. Guttormsen & Gro Steine & Kari Kolstad, 2006. "Consumers' Willingness to Pay for the Color of Salmon: A Choice Experiment with Real Economic Incentives," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 88(4), pages 1050-1061, November. [Downloadable!] (restricted)
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  10. W. Bruce Traill, 2004. "Effect of information about benefits of biotechnology on consumer acceptance of genetically modified food: evidence from experimental auctions in the United States, England, and France," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 31(2), pages 179-204, June.
  11. Anne Rozan & Anne Stenger & Marc Willinger, 2004. "Willingness-to-pay for food safety: an experimental investigation of quality certification on bidding behaviour," Framed Field Experiments 0065, The Field Experiments Website.
  12. Erik Magnusson & J. A. L. Cranfield, 2005. "Consumer Demand for Pesticide Free Food Products in Canada: A Probit Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(1), pages 67-81, 03. [Downloadable!] (restricted)
  13. Anne Rozan, 2004. "Willingness-to-pay for food safety: an experimental investigation of quality certification on bidding behaviour," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 31(4), pages 409-425, December.
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