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

Author

Listed:
  • Scarpa Riccardo

    (Department of Economics, University of Waikato Management School - New Zealand)

  • Thiene Mara

    (Department of Land and Agriculture-Forestry Systems, University of Padua - Italy)

  • Marangon Francesco

    (Department of Economics, University of Udine - Italy)

Abstract

In this paper we investigate consumers' preferences for various environment-friendly production systems for carrots. We use discrete-choice multi-attribute stated-preference data to explore the effect of collective reputations from growers of an Alpine valley known for its environment-friendly production: Val di Gresta 'the valley of organic orchards'. Data analysis of the panel of discrete responses identifies unobserved taste heterogeneity for organic, bio-dynamic and place of origin, while observed heterogeneity for income is addressed by a piece-wise linear function. The implied sample distributions of individual-specific WTP for each of these random attributes are then compared. Results indicate that Integrated Pest Management is preferred to biodynamic as an emerging method. The presence of a premium for Val di Gresta produce is confirmed. The use of an experimental design to identify the relevant second order effects reveals the presence of a reputation effect which can be decomposed into a generic effect from place of origin and a specific one for each EFPMs. Farmers operating in geographically limited marginal areas, such as mountain valleys, may find it useful to invest in collective reputation through high quality standard to achieve higher returns. This strategy may compensate for the dwindling public support to farm income from EU programmes.

Suggested Citation

  • Scarpa Riccardo & Thiene Mara & Marangon Francesco, 2007. "The Value of Collective Reputation for Environmentally-Friendly Production Methods: The Case of Val di Gresta," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(1), pages 1-28, September.
  • Handle: RePEc:bpj:bjafio:v:5:y:2007:i:1:n:7
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    References listed on IDEAS

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    1. Crastes, Romain & Beaumais, Olivier & Arkoun, Ouerdia & Laroutis, Dimitri & Mahieu, Pierre-Alexandre & Rulleau, Bénédicte & Hassani-Taibi, Salima & Barbu, Vladimir Stefan & Gaillard, David, 2014. "Erosive runoff events in the European Union: Using discrete choice experiment to assess the benefits of integrated management policies when preferences are heterogeneous," Ecological Economics, Elsevier, vol. 102(C), pages 105-112.
    2. Sang Hyeon Lee & Doo Bong Han & Vincenzina Caputo & Rodolfo M. Nayga Jr., 2015. "Consumers’ Valuation for a Reduced Salt Product: A Nonhypothetical Choice Experiment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(4), pages 563-582, December.
    3. repec:bla:ecinqu:v:55:y:2017:i:1:p:383-396 is not listed on IDEAS
    4. Westerberg, Vanja Holmquist & Lifran, Robert & Olsen, Søren Bøye, 2010. "To restore or not? A valuation of social and ecological functions of the Marais des Baux wetland in Southern France," Ecological Economics, Elsevier, vol. 69(12), pages 2383-2393, October.
    5. Janssen, Meike & Hamm, Ulrich, 2011. "Certification Logos in the Market for Organic Food: What are Consumers Willing to Pay for Different Logos?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114454, European Association of Agricultural Economists.
    6. Van Loo, Ellen J. & Caputo, Vincenzina & Nayga, Rodolfo M. & Verbeke, Wim, 2014. "Consumers’ valuation of sustainability labels on meat," Food Policy, Elsevier, vol. 49(P1), pages 137-150.
    7. Giergiczny, Marek & Valasiuk, Sviataslau & Czajkowski, Mikolaj & De Salvo, Maria & Signorello, Giovanni, 2012. "Including cost income ratio into utility function as a way of dealing with ‘exploding’ implicit prices in mixed logit models," Journal of Forest Economics, Elsevier, vol. 18(4), pages 370-380.

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    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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