The Role Of Production Methods In Fruit Purchasing Behaviour: Hypothetical Vs Actual Consumers’ Preferences And Stated Minimum Requirements
In recent years, concerns for potential risks on human health related to the overuse of chemical pesticides have encouraged research of alternatives production methods as integrated pest management (IPM) and organic agriculture. Consumer preferences for these practices or for new product characteristics often have been evaluated using stated preference techniques such as Choice Experiment (CE). Nevertheless, it has been found that in these surveys respondents generally report higher hypothetical than real willingness to pay, providing the existence of the so-called “hypothetical bias”. While the presence of this bias has been widely reported in Contingent Valuation, its investigation in CE is still at the beginning. Moreover, in most of the cases, the comparison between hypothetical and real payments treatments has been performed in laboratory settings, employing within-sample approach and providing an initial endowment of money to respondents. This paper contributes to the current literature by presenting an empirical CE study on apples performed in the field (in supermarkets) comparing a hypothetical and a real payment treatment. The latter is done without providing any initial endowment to respondents but asking them to use their own money, that is to pay out of their own pocket. The focus of the survey is to investigate consumers’ preferences for alternative production systems that employ different mixtures of chemicals, natural substances and beneficial microorganisms providing a progressive healthier and safer product. We moved from a conventional to an organic production, passing through an IPM and an innovative technique that employs biocontrol agents. Other investigated attributes are appearance, origin, climate change mitigation practices and price. Moreover, we asked respondents to state their minimum requirements for the attributes’ levels (cut-offs) and to rank the attributes’ importance. Our split sample CE to evaluate apple preferences includes two treatments (hypothetical and real payment) with 96 respondents each. Data were collected in Trentino Province (Italy) during the fall of 2009 by means of a touch-screen computer-assisted self-interviewing system. The results show that consumers’ behavior is significantly different in hypothetical and real treatments, having some parameters a different effect on the probability of purchase in the two treatments. As expected, the price has more influence on the real purchase decision, while alternative methods and the issues of climate change seem weight more heavily in the hypothetical scenarios. Moreover, the coefficient associated to the alternative method that integrates microorganisms into IMP is not statistically significant in both treatments. Regarding the order of attribute importance, the pairwise comparison between the two treatments (hypothetical vs real) indicates that only for the most important attribute (rank 1) the distribution of preferences is statistically different. In any cases, in both treatments the origin is ranked first by the majority of the respondents. Finally, most of interviewed people stated to have cut-offs values in mind when purchasing apples. Regarding methods of production, however, results show that in a real purchasing situation 42% of respondents do not look at the method of production employed at all (with respect to 28% in the hypothetical setting) and, that among those who stated a minimum requirement, 89% violated them. These findings suggest that consumers, besides preferring organic production among other methods, seem to not give much importance on production attribute at the purchasing stage. Furthermore, they do not yet have in mind a clear frame of the other different production methods and their impact on health related aspects.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
Postal:555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jae Bong Chang & Jayson L. Lusk & F. Bailey Norwood, 2007. "How Closely Do Hypothetical Surveys and Laboratory Experiments Predict Field Behavior?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 518-534.
- Carson, Richard T & Groves, Theodore, 2010.
"Incentive and Information Properties of Preference Questions,"
University of California at San Diego, Economics Working Paper Series
qt88d8644g, Department of Economics, UC San Diego.
- Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
- Alfnes, Frode & Yue, Chengyan & Jensen, Helen H., 2010.
"Cognitive Dissonance As a Means of Reducing Hypothetical Bias,"
Staff General Research Papers
31300, Iowa State University, Department of Economics.
- Frode Alfnes & Chengyan Yue & Helen H. Jensen, 2010. "Cognitive dissonance as a means of reducing hypothetical bias," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 37(2), pages 147-163, June.
- Frode Alfnes & Chengyan Yue & Helen H. Jensen, 2009. "Cognitive Dissonance as a Means of Reducing Hypothetical Bias," Center for Agricultural and Rural Development (CARD) Publications 09-wp486, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Deacue Fields & Walt Prevatt, 2008. "An Incentive Compatible Conjoint Ranking Mechanism," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 487-498.
- James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, 03.
- John A. List, 2005.
"The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions,"
NBER Working Papers
11616, National Bureau of Economic Research, Inc.
- John A. List, 2006. "The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 1-37, February.
- John List, 2006. "The behavioralist meets the market: Measuring social preferences and reputation effects in actual transactions," Natural Field Experiments 00300, The Field Experiments Website.
- John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
- Glenn Harrison & John List, 2004.
Artefactual Field Experiments
00058, The Field Experiments Website.
- Scott J. Savage & Donald M. Waldman, 2008. "Learning and fatigue during choice experiments: a comparison of online and mail survey modes," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(3), pages 351-371.
- Shyamal Chowdhury & J. V. Meenakshi & Keith I. Tomlins & Constance Owori, 2010.
"Are Consumers in Developing Countries Willing to Pay More for Micronutrient-Dense Biofortified Foods? Evidence from a Field Experiment in Uganda,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 93(1), pages 83-97.
- Chowdhury, Shyamal K. & Meenakshi, J.V. & Tomlins, Keith & Owori, Constance, 2009. "Are Consumers in Developing Countries Willing-to-Pay More for Micronutrient-Dense Biofortified Foods? Evidence from a Field Experiment in Uganda," 2009 Conference, August 16-22, 2009, Beijing, China 49945, International Association of Agricultural Economists.
- Battalio, Raymond C & Kagel, John H & Jiranyakul, Komain, 1990. " Testing between Alternative Models of Choice under Uncertainty: Some Initial Results," Journal of Risk and Uncertainty, Springer, vol. 3(1), pages 25-50, March.
- Loureiro, Maria L. & Hine, Susan E., 2002. "Discovering Niche Markets: A Comparison Of Consumer Willingness To Pay For Local (Colorado Grown), Organic, And Gmo-Free Products," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(03), December.
- Philip Brown & Nick Chappel & Ray Da Silva Rosa & Terry Walter, 2006. "The Reach of the Disposition Effect: Large Sample Evidence Across Investor Classes-super-," International Review of Finance, International Review of Finance Ltd., vol. 6(1-2), pages 43-78.
- Todd L. Cherry & Stephan Kroll & Jason F. Shogren, 2003.
"The Impact of Endowment Heterogeneity and Origin on Public Good Contributions: Evidence from the Lab,"
03-05, Department of Economics, Appalachian State University.
- Cherry, Todd L. & Kroll, Stephan & Shogren, Jason F., 2005. "The impact of endowment heterogeneity and origin on public good contributions: evidence from the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 57(3), pages 357-365, July.
- Champ, Patricia A. & Moore, Rebecca & Bishop, Richard C., 2009. "A Comparison of Approaches to Mitigate Hypothetical Bias," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(2), October.
- David A. Hensher, 2004. "Identifying the Influence of Stated Choice Design Dimensionality on Willingness to Pay for Travel Time Savings," Journal of Transport Economics and Policy, University of Bath, vol. 38(3), pages 425-446, September.
- Carlsson, Fredrik & He, Haoran & Martinsson, Peter, 2009. "Easy come, easy go - The role of windfall money in lab and field experiments," Working Papers in Economics 374, University of Gothenburg, Department of Economics.
- Cantillo, Víctor & Heydecker, Benjamin & de Dios Ortúzar, Juan, 2006. "A discrete choice model incorporating thresholds for perception in attribute values," Transportation Research Part B: Methodological, Elsevier, vol. 40(9), pages 807-825, November.
- John List & Michael Taylor & Paramita Sinha, 2006.
"Using choice experiments to value non-market goods and services: Evidence from field experiments,"
Natural Field Experiments
00278, The Field Experiments Website.
- List John A. & Sinha Paramita & Taylor Michael H., 2006. "Using Choice Experiments to Value Non-Market Goods and Services: Evidence from Field Experiments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(2), pages 1-39, January.
- William Henry Kaye-Blake & Walt L. Abell & Eva Zellman, 2009.
"Respondents' ignoring of attribute information in a choice modelling survey,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 53(4), pages 547-564, October.
- Kaye-Blake, William & Abell, Walter L. & Zellman, Eva, 2009. "Respondents’ ignoring of attribute information in a choice modelling survey," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), December.
- Gro Steine & Kari Kolstad, 2006. "Consumers' Willingness to Pay for the Color of Salmon: A Choice Experiment with Real Economic Incentives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1050-1061.
- Keeler, James P & James, William L & Abdel-Ghany, Mohamed, 1985. "The Relative Size of Windfall Income and the Permanent Income Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 209-15, June.
- Jay R. Corrigan & Dinah Pura T. Depositario & Rodolfo M. Nayga & Ximing Wu & Tiffany P. Laude, 2006.
"Comparing Open-Ended Choice Experiments and Experimental Auctions: An Application to Golden Rice,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 91(3), pages 837-853.
- Jay R. Corrigan & Dinah Pura T. Depositario & Rodolfo M. Nayga, Jr. & Ximing Wu & Tiffany P. Laude, 2009. "Comparing Open-Ended Choice Experiments and Experimental Auctions: An Application to Golden Rice," Working Papers 0901, Kenyon College, Department of Economics.
- Jeremy Clark, 2002. "House Money Effects in Public Good Experiments," Experimental Economics, Springer, vol. 5(3), pages 223-231, December.
- Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
- Greg Allenby & Geraldine Fennell & Joel Huber & Thomas Eagle & Tim Gilbride & Dan Horsky & Jaehwan Kim & Peter Lenk & Rich Johnson & Elie Ofek & Bryan Orme & Thomas Otter & Joan Walker, 2005. "Adjusting Choice Models to Better Predict Market Behavior," Marketing Letters, Springer, vol. 16(3), pages 197-208, December.
- Wuyang Hu, 2008. "Modeling discrete choices with augmented perception hurdles," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 257-267, 09.
- Johansson-Stenman Olof & Svedsäter Henrik, 2008. "Measuring Hypothetical Bias in Choice Experiments: The Importance of Cognitive Consistency," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-10, September.
- Keasey, Kevin & Moon, Philip, 1996. "Gambling with the house money in capital expenditure decisions: An experimental analysis," Economics Letters, Elsevier, vol. 50(1), pages 105-110, January.
- Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, 1.
- Caussade, Sebastián & Ortúzar, Juan de Dios & Rizzi, Luis I. & Hensher, David A., 2005. "Assessing the influence of design dimensions on stated choice experiment estimates," Transportation Research Part B: Methodological, Elsevier, vol. 39(7), pages 621-640, August.
- Jayson L. Lusk & Ted C. Schroeder, 2004.
"Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
- Jayson Lusk & Ted Schroeder, 2004. "Are choice experiments incentive compatible? A test with quality differentiated beef steaks," Artefactual Field Experiments 00096, The Field Experiments Website.
- Glenn Harrison, 2006. "Experimental Evidence on Alternative Environmental Valuation Methods," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 34(1), pages 125-162, 05.
- Alfnes, Frode & Guttormsen, Atle G. & Steine, Gro & Kolstad, Kari, 2005. "Consumers' Willingness To Pay For The Color Of Salmon:A Choice Experiment With Real Economic Incentives," 2005 Annual meeting, July 24-27, Providence, RI 19126, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- David A. Hensher, 2006. "How do respondents process stated choice experiments? Attribute consideration under varying information load," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(6), pages 861-878.
- Frino, Alex & Grant, Joel & Johnstone, David, 2008. "The house money effect and local traders on the Sydney Futures Exchange," Pacific-Basin Finance Journal, Elsevier, vol. 16(1-2), pages 8-25, January.
When requesting a correction, please mention this item's handle: RePEc:ags:eaa115:116426. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.