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Comparing Accuracy and Costs of Revealed and Stated Preferences: The Case of Consumer Acceptance of Yellow Maize in East Africa

Author

Listed:
  • Kimenju, Simon Chege
  • De Groote, Hugo
  • Morawetz, Ulrich B.

Abstract

For quite a while, stated preferences have been a major tool to measure consumer preferences for new products and services. Revealed preference methods, in particular experimental economics, have gained popularity recently because they have been shown to be more incentive compatible, and therefore more accurate. However, this advantage comes at the expense of higher survey costs. In the developing countries with limited funding for research, it is important to determine whether the extra cost can be justified by the extra gain in accuracy. A survey of 100 farmers was carried out in Western Kenya to determine consumer preference for yellow maize using the contingent valuation, choice experiments and experimental auction methods. Experimental auctions produced the most realistic results for mean willingness to pay. They are also the most accurate at all budget levels, but also the most expensive. Considering their accuracy and realistic results, we conclude that they should be the recommended method in measuring consumer preference in developing countries, since the extra cost is more than recovered by the gain in accuracy.

Suggested Citation

  • Kimenju, Simon Chege & De Groote, Hugo & Morawetz, Ulrich B., 2006. "Comparing Accuracy and Costs of Revealed and Stated Preferences: The Case of Consumer Acceptance of Yellow Maize in East Africa," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25642, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25642
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    File URL: http://purl.umn.edu/25642
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    References listed on IDEAS

    as
    1. Lusk, Jayson L. & Alexander, Corinne E. & Rousu, Matthew C., 2004. "Designing Experimental Auctions For Marketing Research: Effect Of Values, Distributions, And Mechanisms On Incentives For Truthful Bidding," 2004 Annual meeting, August 1-4, Denver, CO 20202, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Jayson L. Lusk & Darren Hudson, 2004. "Willingness-to-Pay Estimates and Their Relevance to Agribusiness Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(2), pages 152-169.
    3. Springer, A. & Mattas, Konstadinos & Papastefanou, G. & Tsioumanis, Asterios, 2002. "Comparing Consumer Attitudes towards Genetically Modified Food in Europe," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24858, European Association of Agricultural Economists.
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    Cited by:

    1. Kirsten, Johann F. & Vermeulen, Hester & Van Zyl, Karlien & Du Randt, Gerrie & Du Plessis, H. & Weissnar, Tessa, 2012. "The economic potential for an origin based marketing and certification system for a meat product in South Africa: Perceptions, preferences, and experiments," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125764, International Association of Agricultural Economists.

    More about this item

    Keywords

    Kenya; maize; consumer; experimental auctions; stated preference; WTP; Crop Production/Industries; Food Consumption/Nutrition/Food Safety; D6; Q12;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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