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Using flexible taste distributions to value collective reputation for environmentally-friendly production methods

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Abstract

In this paper we investigate consumer preferences for various environmentally-friendly production systems for carrots. We use discrete-choice multi-attribute stated-preference data to explore the effect of the collective reputation of growers from an Alpine valley with an established reputation for its environmentally-friendly production: Val di Gresta “the valley of organic orchards”. Data analysis of the panel of discrete responses identifies unobserved taste heterogeneity for organic, biodynamic and place of origin along with extra variance associated with experimentally designed alternatives. The assumed parametric taste distributions are each tested using the semi-nonparametric specification proposed by Fosgerau and Bierlaire (2007), while the null of normality cannot be rejected for organic and biodynamic production methods, it is rejected for the place of origin. The latter is found to be bi-modal, with modes at each side of zero. The use of a flexible taste distribution increases the plausibility of this form of heterogeneity and it appears promising for future applied studies.

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File URL: ftp://mngt.waikato.ac.nz/RePEc/wai/econwp/0724.pdf
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Bibliographic Info

Paper provided by University of Waikato, Department of Economics in its series Working Papers in Economics with number 07/24.

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Length: 25 pages
Date of creation: 11 Nov 2007
Date of revision:
Handle: RePEc:wai:econwp:07/24

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Keywords: Mixed logit; Flexible taste distributions; Random utility parameters; Collective reputation; Sustainable agriculture; Choice modeling; Environmentally-friendly methods;

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Cited by:
  1. Van Wezemael, Lynn & Caputo, Vincenzina & Nayga, Rodolfo M. & Chryssochoidis, George & Verbeke, Wim, 2014. "European consumer preferences for beef with nutrition and health claims: A multi-country investigation using discrete choice experiments," Food Policy, Elsevier, vol. 44(C), pages 167-176.
  2. Abildtrup, Jens & Garcia, Serge & Olsen, Søren Bøye & Stenger, Anne, 2013. "Spatial preference heterogeneity in forest recreation," Ecological Economics, Elsevier, vol. 92(C), pages 67-77.
  3. Stine Broch & Suzanne Vedel, 2012. "Using Choice Experiments to Investigate the Policy Relevance of Heterogeneity in Farmer Agri-Environmental Contract Preferences," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 51(4), pages 561-581, April.
  4. Lim, Kar Ho & Hu, Wuyang & Maynard, Leigh J. & Goddard, Ellen W., 2012. "Stated Preference and Perception Analysis for Traceable and BSE-tested Beef: An Application of Mixed Error-Component Logit Model," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124784, Agricultural and Applied Economics Association.
  5. Dan Marsh & Lena Mkwara & Riccardo Scarpa, 2011. "Do Respondents’ Perceptions of the Status Quo Matter in Non-Market Valuation with Choice Experiments? An Application to New Zealand Freshwater Streams," Sustainability, MDPI, Open Access Journal, vol. 3(9), pages 1593-1615, September.
  6. Rabotyagov, Sergey S. & Lin, Sonja, 2013. "Small forest landowner preferences for working forest conservation contract attributes: A case of Washington State, USA," Journal of Forest Economics, Elsevier, vol. 19(3), pages 307-330.
  7. William Greene & David Hensher, 2010. "Does scale heterogeneity across individuals matter? An empirical assessment of alternative logit models," Transportation, Springer, vol. 37(3), pages 413-428, May.
  8. Mariel, Petr & Ayala, Amaya de & Hoyos, David & Abdullah, Sabah, 2013. "Selecting random parameters in discrete choice experiment for environmental valuation: A simulation experiment," Journal of choice modelling, Elsevier, vol. 7(C), pages 44-57.
  9. Broch, Stine Wamberg & Strange, Niels & Jacobsen, Jette B. & Wilson, Kerrie A., 2013. "Farmers' willingness to provide ecosystem services and effects of their spatial distribution," Ecological Economics, Elsevier, vol. 92(C), pages 78-86.
  10. Balcombe, Kelvin & Burton, Michael & Rigby, Dan, 2011. "Skew and attribute non-attendance within the Bayesian mixed logit model," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 446-461.
  11. Mohammed Hussen Alemu & Morten Raun Mørkbak & Søren Bøye Olsen & Carsten Lynge Jensen, 2011. "Attending to the reasons for attribute non-attendance in Choice Experiments," IFRO Working Paper 2011/8, University of Copenhagen, Department of Food and Resource Economics.
  12. Søren Olsen, 2009. "Choosing Between Internet and Mail Survey Modes for Choice Experiment Surveys Considering Non-Market Goods," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(4), pages 591-610, December.
  13. José Grisolía & Kenneth Willis, 2012. "A latent class model of theatre demand," Journal of Cultural Economics, Springer, vol. 36(2), pages 113-139, May.
  14. Søren Olsen & Thomas Lundhede & Jette Jacobsen & Bo Thorsen, 2011. "Tough and Easy Choices: Testing the Influence of Utility Difference on Stated Certainty-in-Choice in Choice Experiments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 49(4), pages 491-510, August.
  15. Jacobsen, Jette Bredahl & Thorsen, Bo Jellesmark, 2010. "Preferences for site and environmental functions when selecting forthcoming national parks," Ecological Economics, Elsevier, vol. 69(7), pages 1532-1544, May.
  16. Azucena Gracia, 2014. "Consumers’ preferences for a local food product: a real choice experiment," Empirical Economics, Springer, vol. 47(1), pages 111-128, August.
  17. Fosgerau, Mogens & Hess, Stephane, 2009. "A comparison of methods for representing random taste heterogeneity in discrete choice models," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 42, pages 1-25.
  18. Faustin, Vidogbèna & Adégbidi, Anselme A. & Garnett, Stephen T. & Koudandé, Delphin O. & Agbo, Valentin & Zander, Kerstin K., 2010. "Peace, health or fortune?: Preferences for chicken traits in rural Benin," Ecological Economics, Elsevier, vol. 69(9), pages 1848-1857, July.
  19. Doherty, Edel & Campbell, Danny & Hynes, Stephen, 2012. "Exploring cost heterogeneity in recreational demand," Working Papers 148832, Socio-Economic Marine Research Unit, National University of Ireland, Galway.
  20. Morten Mørkbak & Tove Christensen & Dorte Gyrd-Hansen, 2010. "Choke Price Bias in Choice Experiments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(4), pages 537-551, April.

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