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Consumer preferences for fair labour certification

Author

Listed:
  • Andreas C. Drichoutis
  • Achilleas Vassilopoulos
  • Jayson L. Lusk
  • Rodolfo M. NaygaJr.

Abstract

High-profile cases of exploitative labour practices have increased concerns over agricultural working conditions. However, it is unclear to what extent the public is willing to trade-off fair working conditions for higher prices. We implement a large-scale survey in Greece to uncover consumer preferences for a food labelling system that certifies fair working conditions for the workers employed in agricultural production. With our most conservative estimates, we find that consumers are willing to pay an average premium of 53 cents of a Euro per 500 g, 95 per cent CI [43.9, 62.3], for strawberries with fair labour certification. This result suggests that consumers do value the better treatment of workers in the agricultural sector. It also suggests that there is a current market failure, created by the asymmetry of information between consumers and producers, that can be the basis of discussion for alternative labelling schemes involving fair labour labels. We also tested a number of known biases associated with consumer behaviour or the contingent valuation method and found the positive willingness-to-pay result to be robust.

Suggested Citation

  • Andreas C. Drichoutis & Achilleas Vassilopoulos & Jayson L. Lusk & Rodolfo M. NaygaJr., 2017. "Consumer preferences for fair labour certification," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 44(3), pages 455-474.
  • Handle: RePEc:oup:erevae:v:44:y:2017:i:3:p:455-474.
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    File URL: http://hdl.handle.net/10.1093/erae/jbx002
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    More about this item

    Keywords

    fair labour label; willingness-to-pay; equivalent loss; contingent valuation; inferred valuation; consequentiality; cheap talk; uncertainty scale;

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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