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On the Use of Valuation Mechanisms to Measure Consumers' Willingness to Pay for Novel Products: A Comparison of Hypothetical and Non-Hypothetical Values

Author

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  • Silva, Andres
  • Nayga, Rodolfo M., Jr.
  • Campbell, Benjamin L.
  • Park, John L.

Abstract

Willingness to pay (WTP) estimates for novel products are needed to assess consumers' valuation of these products as well as for product adoption and optimal pricing strategies. Using experiments in a retail setting, we compare hypothetical and non-hypothetical WTP values between a Becker-DeGroot-Marshak (BDM) auction mechanism and conjoint analysis. Our results suggest that the auction WTP values are higher than conjoint analysis WTP values. Moreover, the hypothetical WTP values are higher than the non-hypothetical WTP values in both elicitation mechanisms.

Suggested Citation

  • Silva, Andres & Nayga, Rodolfo M., Jr. & Campbell, Benjamin L. & Park, John L., 2007. "On the Use of Valuation Mechanisms to Measure Consumers' Willingness to Pay for Novel Products: A Comparison of Hypothetical and Non-Hypothetical Values," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 10(2), pages 1-16.
    • Handle: RePEc:ags:ifaamr:8186
    DOI: 10.22004/ag.econ.8186
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    References listed on IDEAS

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    Cited by:

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    2. Jaqueline Garcia-Yi, 2014. "Market-Based Instruments for the Conservation of Underutilized Crops: In-Store Experimental Auction of Native Chili Products in Bolivia," Sustainability, MDPI, vol. 6(11), pages 1-19, November.
    3. Wachenheim, Cheryl & Hovde, Scott & Hearne, Robert & Nganje, William, 2015. "Identifying Market Preferences for High Selenium Beef," Journal of Food Distribution Research, Food Distribution Research Society, vol. 46(3), pages 1-18, October.
    4. Shi, Lijia & House, Lisa & Gao, Zhifeng, 2012. "Consumers’ Willingness-to-pay for Organic and Local Blueberries: A Multi-store BDM Auction Controlling for Purchase Intentions," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124998, Agricultural and Applied Economics Association.
    5. Lijia Shi & Lisa A. House & Zhifeng Gao, 2013. "Impact of Purchase Intentions on Full and Partial Bids in BDM Auctions: Willingness-to-pay for Organic and Local Blueberries," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 707-718, September.
    6. Abdelradi, Fadi & Abdu, Khaled, 2015. "Evaluation of consumers' lifestyles and willingness to pay for dates: A hybrid choice model approach," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202720, European Association of Agricultural Economists.
    7. De Marchi, Elisa & Caputo, Vincenzina & Nayga, Rodolfo M. & Banterle, Alessandro, 2016. "Time preferences and food choices: Evidence from a choice experiment," Food Policy, Elsevier, vol. 62(C), pages 99-109.

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