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Willingness-To-Pay for Food of the Own Region: Empirical Estimates from Hypothetical and Incentive Compatible Settings

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  • Burchardi, Henrike
  • Schroeder, Carsten
  • Thiele, Holger D.

Abstract

The ongoing liberalisation of the European food market provides incentives to producers to seek for innovative strategies of product differentiation. One possibility to differentiate the own product from competing ones is its region-of-origin. In this paper, we investigate consumers' willingness-to-pay and underlying preferences for food of the own region. We consider fresh milk as an example. Underlying data stem from a hypothetical contingent valuation and from an incentive compatible experimental setting with real payoffs. We find that consumers perceive fresh milk from local farmers as a trustful, high quality product, and that consumers are interested in supporting local producers. Given that price premiums are small, both methods suggest a substantial demand for local products. However, compared to contingent-valuation estimates, the inclusion of real payoffs leads to a significant decrease in the willingness-to-pay stated. This decrease can mainly be assigned to "pretending altruists": free riding subjects who respond according to social norms as long as no costs are involved.

Suggested Citation

  • Burchardi, Henrike & Schroeder, Carsten & Thiele, Holger D., 2005. "Willingness-To-Pay for Food of the Own Region: Empirical Estimates from Hypothetical and Incentive Compatible Settings," 2005 Annual meeting, July 24-27, Providence, RI 19365, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea05:19365
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    References listed on IDEAS

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    Cited by:

    1. Ehmke, Mariah D., 2006. "International Differences in Consumer Preferences for Food Country-of-Origin: A Meta-Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21193, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Melanie Lefevre, 2011. "Willingness-to-pay for Local Milk-based Dairy Product in Senegal," CREPP Working Papers 1108, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
    3. Lefèvre, Mélanie, 2014. "Do Consumers Pay More for What They Value More? The Case of Local Milk-based Dairy Products in Senegal," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), April.
    4. Adams, Damian C. & Adams, Alison E., 2008. "Availability, Attitudes and Willingness to Pay for Local Foods: Results of a Preliminary Survey," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6237, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    Keywords

    Consumer/Household Economics;

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