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The Value of Collective Reputation for Environmentally Friendly Production Methods: The Case of Val di Gresta

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Author Info
Ricardo Scarpa () (University of Waikato)
Mara Thiene () (University of Padua)
Francesco Marangon () (University of Udine)

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Abstract

This paper investigates preferences for various environment-friendly production systems using 1949 choices from a sample of 240 respondents that chose amongst different types of carrots. The and multi-attribute stated-preference data collection was based on an experimental designed tailored to identify interaction effects between production methods and place of origin we estimate the effect of collective reputations for growers of an Alpine valley known to be completely dedicated to organic production. The implied WTP distributions are positve for organic and integrated pest management and provide evidence of recognition of a collective reputation for environmentally friendly production methods. Marginal utility of income is found to be systematically linked to socio-economic covariates, while unobserved heterogeneity is found for organic and bio-dynamic production methods and for place of origin, but not for integrated pest management. WTP for organic produce from Val di Gresta is found to be around 1-2 euro/kg depending on budget constraints, and not statistically significant for bio-dynamic production. The study confirms the existence of the growers' reputation for EFPMs and provides an empirical estimate of the premium the market awards to such a reputation.

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File URL: ftp://mngt.waikato.ac.nz/RePEc/wai/econwp/0711.pdf
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Publisher Info
Paper provided by University of Waikato, Department of Economics in its series Working Papers in Economics with number 07/11.

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Length: 24 pages
Date of creation: 07 Sep 2007
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Handle: RePEc:wai:econwp:07/11

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Related research
Keywords: Collective reputation mixed logit random utility parameters sustainable agriculture Choice modeling Organic methods

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Find related papers by JEL classification:
C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Statistical Simulation Methods
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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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. Joffre Swait & Wiktor Adamowicz, . "Choice Environment, Market Complexity and Consumer Behavior: A Theoretical and Empirical Approach to Incorporating Decision Complexity into Models of Consumer Choice. 29 p," Staff Papers 9904, University of Alberta, Department of Rural Economics. [Downloadable!]
  2. Loureiro, Maria L., 2003. "Rethinking new wines: implications of local and environmentally friendly labels," Food Policy, Elsevier, vol. 28(5-6), pages 547-560. [Downloadable!] (restricted)
  3. DeShazo, J. R. & Fermo, German, 2002. "Designing Choice Sets for Stated Preference Methods: The Effects of Complexity on Choice Consistency," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 123-143, July. [Downloadable!] (restricted)
  4. Scarpa, Riccardo & Ruto, Eric S. K. & Kristjanson, Patti & Radeny, Maren & Drucker, Adam G. & Rege, John E. O., 2003. "Valuing indigenous cattle breeds in Kenya: an empirical comparison of stated and revealed preference value estimates," Ecological Economics, Elsevier, vol. 45(3), pages 409-426, July. [Downloadable!] (restricted)
  5. Ricardo Scarpa & Mara Thiene & Kenneth Train, 2006. "Utility in WTP Space: A Tool to Address Confounding Random Scale Effects in Destination Choice to the Alps," Working Papers in Economics 06/15, University of Waikato, Department of Economics. [Downloadable!]
  6. Jayson L. Lusk & F. Bailey Norwood, 2005. "Effect of Experimental Design on Choice-Based Conjoint Valuation Estimates," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 87(3), pages 771-785, 08. [Downloadable!] (restricted)
  7. Jason A. Winfree & Jill J. McCluskey, 2005. "Collective Reputation and Quality," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 87(1), pages 206-213, 02. [Downloadable!] (restricted)
  8. Swait, Joffre & Adamowicz, Wiktor, 2001. "Choice Environment, Market Complexity, and Consumer Behavior: A Theoretical and Empirical Approach for Incorporating Decision Complexity into Models of Consumer Choice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 86(2), pages 141-167, November. [Downloadable!] (restricted)
  9. Frode Alfnes, 2004. "Stated preferences for imported and hormone-treated beef: application of a mixed logit model," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 31(1), pages 19-37, March.
  10. Cuyno, Leah C. M. & Norton, George W. & Rola, Agnes, 2001. "Economic analysis of environmental benefits of integrated pest management: a Philippine case study," Agricultural Economics, Blackwell, vol. 25(2-3), pages 227-233, September. [Downloadable!] (restricted)
  11. Ferrini, Silvia & Scarpa, Riccardo, 2007. "Designs with a priori information for nonmarket valuation with choice experiments: A Monte Carlo study," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 342-363, May. [Downloadable!] (restricted)
  12. Edward R. Morey & Vijaya R. Sharma & Anders Karlstrom, 2003. "A Simple Method of Incorporating Income Effects into Logit and Nested-Logit Models: Theory and Application," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(1), pages 248-253, 02. [Downloadable!] (restricted)
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