Label Performance and the Willingness to Pay for Fair Trade Coffee: A Cross-National Perspective
In this paper we investigate how label information detailing the performance of the Fair Trade labeling program with respect to coffee affect consumers’ willingness to pay in the United States and in Germany. We provide respondents (University students in the U.S and Germany) information regarding hypothetical benefits of the Fair Trade Coffee program on its intended beneficiaries on the production side (the revenue gains to participating marginal farmers (scope of the program)), and using stated preference conjoint methods test how this performance criterion relates to the willingness to pay for Fair Trade Coffee. Our empirical results identify a “threshold'' property of performance-based labels. In effect, the willingness-to-pay for performance-based Fair Trade labeled coffee exhibits an inverted-U shape in the sense that the willingness to pay is positively related to the scope of the program, but only up to a critical level. Thereafter, the willingness to pay declines as the income gains to participating growers increases further. Interestingly, this inverted-U property is exhibited by both the U.S. and German respondents with different critical thresholds.
|Date of creation:||23 Oct 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Fax: +49 228 / 73-5097
Web page: http://www.zef.de/
More information through EDIRC
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.:
- Julian Rode & Robin M. Hogarth & Marc Le Menestrel, 2005.
"Ethical differentiation and market behavior: An experimental approach,"
112, Barcelona Graduate School of Economics.
- Rode, Julian & Hogarth, Robin M. & Le Menestrel, Marc, 2008. "Ethical differentiation and market behavior: An experimental approach," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 265-280, May.
- Julian Rode & Robin Hogarth & Marc Le Menestrel, 2004. "Ethical differentiation and market behavior: An experimental approach," Economics Working Papers 779, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2006.
- Adamowicz W. & Louviere J. & Williams M., 1994. "Combining Revealed and Stated Preference Methods for Valuing Environmental Amenities," Journal of Environmental Economics and Management, Elsevier, vol. 26(3), pages 271-292, May.
- Basu, Arnab K. & Chau, Nancy H. & Grote, Ulrike, 2003.
"On Export Rivalry And The Greening Of Agriculture - The Role Of Eco-Labels,"
18764, University of Bonn, Center for Development Research (ZEF).
- Basu, Arnab K. & Chau, Nancy H. & Grote, Ulrike, 2004. "On export rivalry and the greening of agriculture--the role of eco-labels," Agricultural Economics, Blackwell, vol. 31(2-3), pages 135-147, December.
- Arnab K. Basu & Nancy H. Chau & Ulrike Grote, 2003. "Eco-Labeling and Stages of Development," Review of Development Economics, Wiley Blackwell, vol. 7(2), pages 228-247, 05.
- Wesley Nimon & John C. Beghin, 1998.
"Are Eco-Labels Valuable? Evidence from the Apparel Industry,"
Center for Agricultural and Rural Development (CARD) Publications
99-wp213, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Wesley Nimon & John Beghin, 1999. "Are Eco-Labels Valuable? Evidence From the Apparel Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 801-811.
- Nimon, W. & Beghin, John C., 2008. "Are Eco-Labels Valuable? Evidence from the Apparel Industry," Staff General Research Papers 12741, Iowa State University, Department of Economics.
- Nimon, R. Wesley & Beghin, John C., 1998. "Are Eco-Labels Valuable? Evidence From The Apparel Industry," 1998 Annual meeting, August 2-5, Salt Lake City, UT 21016, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Nimon, Wesley & Beghin, John C., 1999. "Are Eco-Labels Valuable? Evidence from the Apparel Industry," Staff General Research Papers 1514, Iowa State University, Department of Economics.
- Taylor, Peter Leigh, 2005. "In the Market But Not of It: Fair Trade Coffee and Forest Stewardship Council Certification as Market-Based Social Change," World Development, Elsevier, vol. 33(1), pages 129-147, January.
- O'Brien, Kelly A. & Teisl, Mario F., 2004. "Eco-information and its effect on consumer values for environmentally certified forest products," Journal of Forest Economics, Elsevier, vol. 10(2), pages 75-96, September.
- Loureiro, Maria L. & Lotade, Justus, 2005. "Do fair trade and eco-labels in coffee wake up the consumer conscience?," Ecological Economics, Elsevier, vol. 53(1), pages 129-138, April.
- Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2.
- Bjorner, Thomas Bue & Hansen, L.G.Lars Garn & Russell, Clifford S., 2004.
"Environmental labeling and consumers' choice--an empirical analysis of the effect of the Nordic Swan,"
Journal of Environmental Economics and Management,
Elsevier, vol. 47(3), pages 411-434, May.
- Thomas Bue Bjorner & Lars Garn Hansen & Clifford S. Russell, 2002. "Environmental Labelling and Consumer's Choice - An Empirical Analysis of the Effect of the Nordic Swan," Vanderbilt University Department of Economics Working Papers 0203, Vanderbilt University Department of Economics.
- DeShazo, J. R. & Fermo, German, 2002. "Designing Choice Sets for Stated Preference Methods: The Effects of Complexity on Choice Consistency," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 123-143, July.
- Arnab K. Basu & Nancy H. Chau & Ulrike Grote, 2006. "Guaranteed Manufactured without Child Labor: The Economics of Consumer Boycotts, Social Labeling and Trade Sanctions," Review of Development Economics, Wiley Blackwell, vol. 10(3), pages 466-491, 08.
When requesting a correction, please mention this item's handle: RePEc:ags:ubzefd:44336. 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 references are entirely missing, you can add them using this form.