Consumers' Valuation of Rice Grade Labeling

The objectives of this study are to identify consumers’ willingness to pay (WTP) for each rice grade (i.e. super, good, and normal) and to investigate consumers’ valuation for a mandatory rice grading system. We utilized a non-hypothetical experimental auction (i.e. random nth price auction) to elicit consumers’ valuation for rice grades and used contingent valuation method (i.e. double-bounded dichotomous choice) to obtain consumers’ valuation for the mandatory rice grading system. Our results generally suggest that the provision of rice grade labeling to consumers is very important to enhance the value of domestic rice. Moreover, quality differentiation of rice is critical to receive a high price since Korean consumers have a strong preference and high valuation for ‘Super’ grade rice. Korean consumers also have a positive preference for the mandatory rice grading system without the ‘no test’ option. These results partly give an incentive to improve the current rice grading system in South Korea.