The economic potential for an origin based marketing and certification system for a meat product in South Africa: Perceptions, preferences, and experiments
The difference between hypothetical and real values when evaluating consumers’ preferences (termed ‘hypothetical bias’) has received significant attention in scientific literature, as the outcome of this bias is often an overestimation of willingness to pay (WTP) values. This is the main focus of this paper as we unpack South African consumers’ perceptions and preferences for an origin based meat product through a set of different methodologies. These different approaches (sensory analysis, perception analysis, conjoint analysis, experimental auction and an in-store experiment) are all employed to illustrate the ‘hypothetical bias’ but also to establish beyond any doubt the market potential for a specific origin based meat product and also to test the consumers’ willingness to pay a premium, and the range of the premium obtained from different methodologies. This paper presents the results of a number of studies applying different methods related to the same product but with different groups of consumers in different locations. The different results suggest that there is sufficient evidence that suggest that the regional identity of the product is important. It is further also evident that the various willingness to pay estimates presented different results. It is however clear that the stated preference methods confirm the hypothesis that consumers recognise the reputation of the product and will be willing to pay premium. This conclusion is strengthened by the positive results from the stated preference methods (the experimental auction and in-store experiment). Together these results present a strong case for the marketing potential of origin based mutton / lamb which could sell at a price premium similar or slightly higher than comparable existing luxury and niche lamb brands on the South African market.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.iaae-agecon.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.:
- Kiesel, Kristin & Villas-Boas, Sofia B., 2013.
"Can information costs affect consumer choice? Nutritional labels in a supermarket experiment,"
International Journal of Industrial Organization,
Elsevier, vol. 31(2), pages 153-163.
- Kiesel, Kristin & Villas-Boas, Sofia Berto, 2010. "Can Information Costs Affect Consumer Choice?—Nutritional Labels in a Supermarket Experiment—," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116433, European Association of Agricultural Economists;Agricultural and Applied Economics Association.
- Helena Resano-Ezcaray & Ana Isabel Sanjuán-López & Luis Miguel Albisu-Aguado, 2010. "Combining Stated and Revealed Preferences on Typical Food Products: The Case of Dry-Cured Ham in Spain," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 480-498.
- Frode Alfnes & Kyrre Rickertsen, 2003. "European Consumers' Willingness to Pay for U.S. Beef in Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 396-405.
- Maria L. Loureiro & Jill J. McCluskey & Ron C. Mittelhammer, 2003. "Are Stated Preferences Good Predictors of Market Behavior?," Land Economics, University of Wisconsin Press, vol. 79(1), pages 44-45.
- Evans, Jason R. & D'Souza, Gerard E. & Collins, Alan R. & Brown, Cheryl & Sperow, Mark, 2011.
"Determining Consumer Perceptions of and Willingness to Pay for Appalachian Grass-Fed Beef: An Experimental Economics Approach,"
Agricultural and Resource Economics Review,
Northeastern Agricultural and Resource Economics Association, vol. 40(2), August.
- Evans, Jason R. & Brown, Cheryl & Collins, Alan R. & D'Souza, Gerard E. & Rayburn, Edward B. & Sperow, Mark, 2008. "Determining Consumer Perceptions of and Willingness to Pay or Appalachian Grass-fed Beef: An Experimental Economics Approach," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6209, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Birol, Ekin & Roy, Devesh & Torero, Maximo, 2010. "How safe is my food?: Assessing the effect of information and credible certification on consumer demand for food safety in developing countries," IFPRI discussion papers 1029, International Food Policy Research Institute (IFPRI).
- 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, Springer;European Association of Environmental and Resource Economists, vol. 34(1), pages 125-162, 05.
- 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.
- 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.
- Alfnes, Frode & Yue, Chengyan & Jensen, Helen H., 2010. "Cognitive Dissonance As a Means of Reducing Hypothetical Bias," Staff General Research Papers Archive 31300, Iowa State University, Department of Economics.
- 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.
- 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.
- Shogren, Jason F. & Margolis, Michael & Koo, Cannon & List, John A., 2001.
"A random nth-price auction,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 46(4), pages 409-421, December.
- Horowitz, John K. & McConnell, Kenneth E., 2002. "A Review of WTA/WTP Studies," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 426-447, November.
- Kar H. Lim & Wuyang Hu & Leigh J. Maynard & Ellen Goddard, 2013.
"U.S. Consumers’ Preference and Willingness to Pay for Country-of-Origin-Labeled Beef Steak and Food Safety Enhancements,"
Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie,
Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 61(1), pages 93-118, 03.
- Lim, Kar Ho & Maynard, Leigh J. & Hu, Wuyang & Goddard, Ellen W., 2011. "U.S. Consumers’ Preference and Willingness to Pay for Country-of-Origin-Labeled Beef Steak and Food Safety Enhancements," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103385, Agricultural and Applied Economics Association.
- 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.
- Loureiro, Maria L. & Umberger, Wendy J., 2007. "A choice experiment model for beef: What US consumer responses tell us about relative preferences for food safety, country-of-origin labeling and traceability," Food Policy, Elsevier, vol. 32(4), pages 496-514, August.
- 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.
- 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, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, 03.
When requesting a correction, please mention this item's handle: RePEc:ags:iaae12:125764. 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.