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Green market expansion by reducing information asymmetries: Evidence for labeled organic food products

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  • Rousseau, Sandra
  • Vranken, Liesbet

Abstract

We investigate how the provision of objective information about the environmental and health impact of organic labels by policy makers can influence the willingness-to-pay of consumers for labeled organic apples in Flanders (Belgium). Using a stated choice experiment, we initially find that Flemish consumers are willing to pay a positive price premium of some 33 eurocent per kilogram for labeled organic apples. After the provision of information on the actual environmental and health effects of organic apple production, this price premium becomes even more pronounced and increases to 57 eurocent per kilogram. Using a conditional logit model with covariates and a mixed logit model, we find evidence of preference heterogeneity. Also, the effect of information provision is more pronounced for certain groups of consumers such as non-vegetarians, infrequent buyers of organic products and members of a nature protection organization. As such, this paper illustrates that there is a role for policy makers and CSR producers in providing more accurate and reliable information about socially responsible production processes. Moreover, it is important to take the observed preference heterogeneity into account and tailor policies to specific consumer groups.

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  • Rousseau, Sandra & Vranken, Liesbet, 2013. "Green market expansion by reducing information asymmetries: Evidence for labeled organic food products," Food Policy, Elsevier, vol. 40(C), pages 31-43.
  • Handle: RePEc:eee:jfpoli:v:40:y:2013:i:c:p:31-43
    DOI: 10.1016/j.foodpol.2013.01.006
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    3. Vlaeminck, Pieter & Jiang, Ting & Vranken, Liesbet, 2014. "How can environmental information align consumer behaviour with attitude? Evidence from a field experiment," Working Papers 162425, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
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    7. Goedele Van den Broeck & Kaat Van Hoyweghen & Miet Maertens, 2016. "Employment Conditions in the Senegalese Horticultural Export Industry: A Worker Perspective," Development Policy Review, Overseas Development Institute, vol. 34(2), pages 301-319, March.
    8. Vlaeminck, Pieter & Jiang, Ting & Vranken, Liesbet, 2014. "Food labeling and eco-friendly consumption: Experimental evidence from a Belgian supermarket," Ecological Economics, Elsevier, vol. 108(C), pages 180-190.
    9. 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.
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    14. Vlaeminck, Pieter & Vandoren, Jana & Vranken, Liesbet, 2014. "Are labels delivering what they intend? Explicit value of fair-trade labels versus implicit value of fair trade characteristics," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182941, European Association of Agricultural Economists.
    15. Wu, Linhai & Wang, Shuxian & Zhu, Dian & Hu, Wuyang & Wang, Hongsha, 2015. "Chinese consumers’ preferences and willingness to pay for traceable food quality and safety attributes: The case of pork," China Economic Review, Elsevier, vol. 35(C), pages 121-136.
    16. Vlaeminck, Pieter & Jiang, Ting & Vranken, Liesbet, 2014. "Labelling and consumer behaviour: experimental evidence from a Belgian supermarket," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182742, European Association of Agricultural Economists.
    17. Li, Tongzhe & Fooks, Jacob & Messer, Kent D., 2017. "Residents’ Preferences in Adopting Water Runoff Management Practices: Examining the Effect of Behavioral Nudges in a Field Experiment," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259127, Agricultural and Applied Economics Association.
    18. Vlaeminck, Pieter & Vranken, Liesbet, 2015. "Do labels capture consumers’ actual willingness to pay for Fair Trade characteristics?," Working Papers 206438, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
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    23. Meixner, Oliver & Haas, Rainer & Perevoshchikova, Yana & Canavari, Maurizio, 2014. "Consumer Attitudes, Knowledge, and Behavior in the Russian Market for Organic Food," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 0(Number 2), pages 1-11, October.
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