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The use of a hybrid latent class approach to identify consumer segments and market potential for organic products in Nigeria

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  • Muhammad Bello
  • Awudu Abdulai

Abstract

Using data from a hypothetical stated preference survey conducted in Nigeria, we show how the relative importance that consumers attach to organic products’ attributes varies strongly as a function of underlying attitudes. We specify a latent class structure that allows us to jointly analyze responses to stated choice and assignment to latent classes, while avoiding measurement error problems. Our results reveal that consumers are willing to pay premium for both health and environmental gains achieved through organic production systems, although their quantitative valuation is higher for the health concerns. Furthermore, we note that individuals with stronger preferences for organic products tend to attach a global value to the certification program, whereas the valuation tends to be more restrictive among respondents that prioritize the status quo option (conventional alternative). We also observe that differences in respondents’ geographic location and level of awareness of organic food production characteristics (prior to the survey) have significant impact on consumers’ choices.[EconLit citations: D12, Q13, Q18, Q56]

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  • Muhammad Bello & Awudu Abdulai, 2018. "The use of a hybrid latent class approach to identify consumer segments and market potential for organic products in Nigeria," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 190-203, March.
    • Handle: RePEc:wly:agribz:v:34:y:2018:i:2:p:190-203
    DOI: 10.1002/agr.21506
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    4. Akinwehinmi, Oluwagbenga & Ogundari, Kolawole & Amos, Taiwo, 2021. "Consumers' Food Control Risk Perception and Preference for Government-Controlled Safety Certification in Emerging Food Markets," 2021 Conference, August 17-31, 2021, Virtual 315312, International Association of Agricultural Economists.
    5. Akinwehinmi, Joseph Oluwagbenga & Amos, Taye Timothy & Ogundari, Kolawole, 2021. "Consumer preferences for organic vegetables in southwestern Nigeria: A choice experiment approach," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 16(1), March.
    6. Yu, Yanan & He, Yong & Zhao, Xuan, 2021. "Impact of demand information sharing on organic farming adoption: An evolutionary game approach," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    7. Enoch Owusu-Sekyere & Helena Hansson & Evgenij Telezhenko, 2022. "Use and non-use values to explain farmers’ motivation for the provision of animal welfare [Risk factors associated with on-farm mortality in Swedish dairy cows]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(2), pages 499-525.

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