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Willingness to pay estimates informing agribusiness decision making: a cautionary tale

Author

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  • Bir, Courtney
  • Cummins, Ann M.
  • Widmar, Nicole Olynk
  • Wolf, Chistopher A.

Abstract

Multiple methods to improve reliability of results when using willingness-to-pay (WTP) to evaluate consumer preferences have been developed. This study compared methods of accounting for attribute non-attendance (ANA) in WTP for food product attributes. Both inferred and stated ANA were studied and estimates of WTP for pork chop and bacon attributes were compared. A larger number of significant differences were found between stated or inferred ANA corrected models than between corrected and uncorrected models. Significant correlations between inferred and stated ANA were not present and WTP estimates from correcting for inferred ANA (IANA) or stated ANA were statistically different from one another. Exploring WTP estimates across ANA corrected models is imperative for improving models to provide insight into consumer preferences. These insights can be used in making production decisions in order to meet consumer demands and inconsistent results can lead to conflicting business decisions.

Suggested Citation

  • Bir, Courtney & Cummins, Ann M. & Widmar, Nicole Olynk & Wolf, Chistopher A., 2018. "Willingness to pay estimates informing agribusiness decision making: a cautionary tale," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(7), August.
  • Handle: RePEc:ags:ifaamr:284909
    DOI: 10.22004/ag.econ.284909
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    Keywords

    Consumer/Household Economics;

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