IDEAS home Printed from https://ideas.repec.org/a/bla/canjag/v71y2023i3-4p303-327.html
   My bibliography  Save this article

Willingness to pay for credence attributes associated with agri‐food products—Evidence from Canada

Author

Listed:
  • Ousmane Z. Traoré
  • Lota D. Tamini
  • Bernard Korai

Abstract

Credence attributes such as environmental impact, origin, fairness/unfairness, and food safety/health are not available with certainty prior to or at the time of the consumer purchase decision. This creates a problem of imperfect or asymmetric information, leading to suboptimal supply and demand for products with these desirable attributes. Using a representative sample of 2001 Canadian consumers, we adopt, within an attribute‐based decision‐making framework, the asymptotically efficient double‐bounded stated preference approach, to estimate Canadian consumers' willingness to pay for origin, fairness, environmental impact, and food safety attributes associated with pork chops and fresh apples. We find that, on average, consumers are willing to pay significantly more for pork chops and fresh apples that are farmers‐advantaged, sourced from their own province, grown or raised under a production system designed to be environmentally sustainable, and chemical‐free. However, these findings differ significantly by the province of origin, gender, age, and income of the respondents, as well as by product type and attributes being valued. Les attributs de confiance tels que l'impact environnemental, l'origine, l'équité/iniquité et la sécurité/santé de produits agroalimentaires ne sont pas disponibles avec certitude avant ou même au moment de la décision d'achat du consommateur. Cela induit que la prise de décision intervient généralement dans un contexte d'information imparfaite ou asymétrique conduisant à une offre et une demande sous‐optimales pour les produits présentant ce type de caractéristiques. À l'aide d'un échantillon représentatif de 2,001 consommateurs canadiens, nous adoptons, dans un cadre de prise de décision basé sur les attributs, l'approche asymptotiquement efficace des préférences déclarées à double‐bornes, afin d'estimer le consentement à payer des consommateurs canadiens pour des attributs d'origine, d'équité, d'impact environnemental, et de sécurité sanitaire associés aux côtelettes de porc et aux pommes fraîches. Nous constatons qu'en moyenne, les consommateurs sont prêts à payer beaucoup plus cher pour des côtelettes de porc et des pommes fraîches provenant d'agriculteurs plus avantagés, de leur propre province, cultivées ou élevées dans le cadre d'un système de production conçu pour être respectueux de l'environnement et sans produits chimiques. Toutefois, ces résultats diffèrent considérablement selon la province d'origine, le sexe, l'âge et le revenu des personnes interrogées, ainsi que selon le type de produit et les attributs étudiés.

Suggested Citation

  • Ousmane Z. Traoré & Lota D. Tamini & Bernard Korai, 2023. "Willingness to pay for credence attributes associated with agri‐food products—Evidence from Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(3-4), pages 303-327, September.
  • Handle: RePEc:bla:canjag:v:71:y:2023:i:3-4:p:303-327
    DOI: 10.1111/cjag.12336
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/cjag.12336
    Download Restriction: no

    File URL: https://libkey.io/10.1111/cjag.12336?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Atozou, Baoubadi & Tamini, Lota D. & Bergeronm, Stephane & Doyon, Maurice, 2020. "Factors Explaining the Hypothetical Bias: How to Improve Models for Meta-Analyses," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 45(2), March.
    2. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    3. Hermann Donfouet & P. Jeanty & P.-A. Mahieu, 2014. "Dealing with internal inconsistency in double-bounded dichotomous choice: an application to community-based health insurance," Empirical Economics, Springer, vol. 46(1), pages 317-328, February.
    4. Cameron Trudy Ann & Quiggin John, 1994. "Estimation Using Contingent Valuation Data from a Dichotomous Choice with Follow-Up Questionnaire," Journal of Environmental Economics and Management, Elsevier, vol. 27(3), pages 218-234, November.
    5. Michael Hanemann & John Loomis & Barbara Kanninen, 1991. "Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1255-1263.
    6. Brian C. Briggeman & Jayson L. Lusk, 2011. "Preferences for fairness and equity in the food system," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 38(1), pages 1-29, March.
    7. Kanninen Barbara J., 1995. "Bias in Discrete Response Contingent Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 114-125, January.
    8. Loomis, John B., 2014. "2013 WAEA Keynote Address: Strategies for Overcoming Hypothetical Bias in Stated Preference Surveys," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(1), pages 1-13, April.
    9. Kim Darby & Marvin T. Batte & Stan Ernst & Brian Roe, 2008. "Decomposing Local: A Conjoint Analysis of Locally Produced Foods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 476-486.
    10. Burton, Anthony C. & Carson, Katherine S. & Chilton, Susan M. & Hutchinson, W. George, 2003. "An experimental investigation of explanations for inconsistencies in responses to second offers in double referenda," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 472-489, November.
    11. Giulia Maesano & Giuseppe Di Vita & Gaetano Chinnici & Gioacchino Pappalardo & Mario D'Amico, 2020. "The Role of Credence Attributes in Consumer Choices of Sustainable Fish Products: A Review," Sustainability, MDPI, vol. 12(23), pages 1-18, November.
    12. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
    13. Li, Shanshan & Kallas, Zein, 2021. "Meta-Analysis of Consumers’ Willingness to Pay for Sustainable Food Products," 2021 Conference, August 17-31, 2021, Virtual 314970, International Association of Agricultural Economists.
    14. Busch, Gesa & Spiller, Achim, 2016. "Farmer share and fair distribution in food chains from a consumer’s perspective," Journal of Economic Psychology, Elsevier, vol. 55(C), pages 149-158.
    15. Jayson Lusk & Tomas Nilsson & Ken Foster, 2007. "Public Preferences and Private Choices: Effect of Altruism and Free Riding on Demand for Environmentally Certified Pork," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(4), pages 499-521, April.
    16. Mary F. Evans & Nicholas E. Flores & Kevin J. Boyle, 2003. "Multiple-Bounded Uncertainty Choice Data as Probabilistic Intentions," Land Economics, University of Wisconsin Press, vol. 79(4), pages 549-560.
    17. Maurice Doyon & Stéphane Bergeron, 2016. "Understanding Strategic Behavior and Its Contribution to Hypothetical Bias When Eliciting Values for a Private Good," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(4), pages 653-666, December.
    18. McFadden, Jonathan R. & Huffman, Wallace E., 2017. "Willingness-to-pay for natural, organic, and conventional foods: The effects of information and meaningful labels," Food Policy, Elsevier, vol. 68(C), pages 214-232.
    19. Peterson, Hikaru Hanawa & Taylor, Mykel R. & Baudouin, Quentin, 2015. "Preferences of locavores favoring community supported agriculture in the United States and France," Ecological Economics, Elsevier, vol. 119(C), pages 64-73.
    20. Aizaki, Hideo, 2012. "Basic Functions for Supporting an Implementation of Choice Experiments in R," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 50(c02).
    21. 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(2), pages 1-18, December.
    22. Wendy J. Umberger & Dawn D. Thilmany McFadden & Amanda R. Smith, 2009. "Does altruism play a role in determining U.S. consumer preferences and willingness to pay for natural and regionally produced beef?," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 268-285.
    23. Lauren Chenarides & Carola Grebitus & Jayson L Lusk & Iryna Printezis, 2022. "A calibrated choice experiment method," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(5), pages 971-1004.
    24. Welsh, Michael P. & Poe, Gregory L., 1998. "Elicitation Effects in Contingent Valuation: Comparisons to a Multiple Bounded Discrete Choice Approach," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 170-185, September.
    25. Hua Wang & Jie He, 2011. "Estimating individual valuation distributions with multiple bounded discrete choice data," Applied Economics, Taylor & Francis Journals, vol. 43(21), pages 2641-2656.
    26. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    27. Alberini, Anna & Boyle, Kevin & Welsh, Michael, 2003. "Analysis of contingent valuation data with multiple bids and response options allowing respondents to express uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 40-62, January.
    28. Jerrod M Penn & Wuyang Hu, 2018. "Understanding Hypothetical Bias: An Enhanced Meta-Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(4), pages 1186-1206.
    29. John Loomis, 2011. "What'S To Know About Hypothetical Bias In Stated Preference Valuation Studies?," Journal of Economic Surveys, Wiley Blackwell, vol. 25(2), pages 363-370, April.
    30. Rana, Jyoti & Paul, Justin, 2017. "Consumer behavior and purchase intention for organic food: A review and research agenda," Journal of Retailing and Consumer Services, Elsevier, vol. 38(C), pages 157-165.
    31. Bernard, Kévin & Bonein, Aurélie & Bougherara, Douadia, 2020. "Consumer inequality aversion and risk preferences in community supported agriculture," Ecological Economics, Elsevier, vol. 175(C).
    32. Herriges, Joseph A. & Shogren, Jason F., 1996. "Starting Point Bias in Dichotomous Choice Valuation with Follow-Up Questioning," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 112-131, January.
    33. Chang, Jae Bong & Lusk, Jayson L., 2009. "Fairness and food choice," Food Policy, Elsevier, vol. 34(6), pages 483-491, December.
    34. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    35. Daniel McFadden, 1994. "Contingent Valuation and Social Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 689-708.
    36. Gracia, Azucena & de Magistris, Tiziana, 2008. "The demand for organic foods in the South of Italy: A discrete choice model," Food Policy, Elsevier, vol. 33(5), pages 386-396, October.
    37. Vossler, Christian A. & Poe, Gregory L., 2005. "Analysis of contingent valuation data with multiple bids and response options allowing respondents to express uncertainty: a comment," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 197-200, January.
    38. Katherine Fuller & Carola Grebitus & Troy G. Schmitz, 2022. "The effects of values and information on the willingness to pay for sustainability credence attributes for coffee," Agricultural Economics, International Association of Agricultural Economists, vol. 53(5), pages 775-791, September.
    39. Loomis, John B. & Ekstrand, Earl, 1997. "Economic Benefits Of Critical Habitat For The Mexican Spotted Owl: A Scope Test Using A Multiple-Bounded Contingent Valuation Survey," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(2), pages 1-11, December.
    40. Thomas Leonard, 2008. "Richard H. Thaler, Cass R. Sunstein, Nudge: Improving decisions about health, wealth, and happiness," Constitutional Political Economy, Springer, vol. 19(4), pages 356-360, December.
    41. Lucio CECCHINI & Biancamaria TORQUATI & Massimo CHIORRI, 2018. "Sustainable agri-food products: A review of consumer preference studies through experimental economics," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(12), pages 554-565.
    42. Bateman, Ian J. & Burgess, Diane & Hutchinson, W. George & Matthews, David I., 2008. "Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 127-141, March.
    43. Printezis, Iryna & Grebitus, Carola, 2018. "Marketing Channels for Local Food," Ecological Economics, Elsevier, vol. 152(C), pages 161-171.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hermann Donfouet & P. Jeanty & P.-A. Mahieu, 2014. "Dealing with internal inconsistency in double-bounded dichotomous choice: an application to community-based health insurance," Empirical Economics, Springer, vol. 46(1), pages 317-328, February.
    2. Vossler, Christian A., 2003. "Multiple bounded discrete choice contingent valuation: parametric and nonparametric welfare estimation and a comparison to the payment card," MPRA Paper 38867, University Library of Munich, Germany.
    3. Bateman, Ian J. & Langford, Ian H. & Jones, Andrew P. & Kerr, Geoffrey N., 2001. "Bound and path effects in double and triple bounded dichotomous choice contingent valuation," Resource and Energy Economics, Elsevier, vol. 23(3), pages 191-213, July.
    4. Aravena, Claudia & Hutchinson, W. George & Carlsson, Fredrik & Matthews, David I, 2015. "Testing preference formation in learning design contingent valuation (LDCV) using advanced information and repetitivetreatments," Working Papers in Economics 619, University of Gothenburg, Department of Economics.
    5. Hanemann, W. Michael & Kanninen, Barbara, 1996. "The Statistical Analysis Of Discrete-Response Cv Data," CUDARE Working Papers 25022, University of California, Berkeley, Department of Agricultural and Resource Economics.
    6. Siikamaki, Juha & Layton, David F., 2007. "Discrete choice survey experiments: A comparison using flexible methods," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 122-139, January.
    7. Lauren Chenarides & Carola Grebitus & Jayson L Lusk & Iryna Printezis, 2022. "A calibrated choice experiment method," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(5), pages 971-1004.
    8. Flachaire, Emmanuel & Hollard, Guillaume, 2007. "Starting point bias and respondent uncertainty in dichotomous choice contingent valuation surveys," Resource and Energy Economics, Elsevier, vol. 29(3), pages 183-194, September.
    9. Gelo, Dambala & Koch, Steven F., 2015. "Contingent valuation of community forestry programs in Ethiopia: Controlling for preference anomalies in double-bounded CVM," Ecological Economics, Elsevier, vol. 114(C), pages 79-89.
    10. Lee, Chul-Yong & Heo, Hyejin, 2016. "Estimating willingness to pay for renewable energy in South Korea using the contingent valuation method," Energy Policy, Elsevier, vol. 94(C), pages 150-156.
    11. Siikamaki, Juha & Layton, David F., 2006. "Discrete Choice Survey Experiments: A Comparison Using Flexible Models," RFF Working Paper Series dp-05-60, Resources for the Future.
    12. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.
    13. John C. Whitehead, 2002. "Incentive Incompatibility and Starting-Point Bias in Iterative Valuation Questions," Land Economics, University of Wisconsin Press, vol. 78(2), pages 285-297.
    14. Watson, Verity & Ryan, Mandy, 2007. "Exploring preference anomalies in double bounded contingent valuation," Journal of Health Economics, Elsevier, vol. 26(3), pages 463-482, May.
    15. Swallow, Stephen K. & Opaluch, James J. & Weaver, Thomas F., 2001. "Strength-of-Preference Indicators and an Ordered-Response Model for Ordinarily Dichotomous, Discrete Choice Data," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 70-93, January.
    16. Jasper Grashuis & Ye Su, 2022. "Inequality aversion and consumer ethnocentrism: Food consumer preferences for payoff distributions to farm producers," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 608-619, July.
    17. Carmelo León & Francisco Vázquez-Polo, 1998. "A Bayesian Approach to Double Bounded Contingent Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(2), pages 197-215, March.
    18. Corsi, Alessandro, 2012. "Willingness-to-pay in terms of price: an application to organic beef during and after the “mad cow” crisis," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 92(01), pages 25-46, October.
    19. Day, Brett & Bateman, Ian J. & Carson, Richard T. & Dupont, Diane & Louviere, Jordan J. & Morimoto, Sanae & Scarpa, Riccardo & Wang, Paul, 2012. "Ordering effects and choice set awareness in repeat-response stated preference studies," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 73-91.
    20. W. George Hutchinson & Riccardo Scarpa & Susan M. Chilton & T. McCallion, 2001. "Parametric and Non‐Parametric Estimates of Willingness to Pay for Forest Recreation in Northern Ireland: A Discrete Choice Contingent Valuation Study with Follow‐Ups," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(1), pages 104-122, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:canjag:v:71:y:2023:i:3-4:p:303-327. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/caefmea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.