Eliciting consumer willingness to pay for food quality' attributes: experiments conducted in Tanzania, Norway and the US
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Date
2014-11
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Norwegian University of Life Sciences
Abstract
In measuring consumer preference and willingness to pay for product attributes, many things matter, among them context and choice of methods. This thesis focuses on (1) assessing
preference for food quality attributes in different context (all papers) and (2) comparison of results from different methods (paper 2 and 3). The thesis includes data collected in four different experiments in three countries: Tanzania (paper 1 and 2), US (paper 3) and Norway
(paper 4). The thesis contributes to the literature on consumer preference studies in Africa, Europe and the US, on experimental valuation methods related to food in Africa, and to the
duality literature on preference for food safety standards in restaurants. The four papers should be read independently.
The first paper assess the willingness to pay for food safety related attributes in an artefactual field experiment in Tanzania. The paper finds that consumers in Tanzania are concerned with
food safety, and the results arc consistent across low and high-income consumers, and across both genders. Men generally have a higher willingness to pay for the food products, however women are willing to pay more for food safety related attributes. Preference for food safety
does not however translate into preferences for origins associated with better agricultural
practices, meaning consumer probably do not associate origin with safety but rather with
other attributes like sustainability or taste. For example, in the study consumers show royalty towards their country and antipathy towards South Africa.
In paper 2, we compare four different experimental valuation methods that can be conducted with one respondent at a time in a traditional African food market. The traditional way of conducting food preference studies was through surveys, but in the past two decades there has
been a growing literature using lab and field experiments in Europe and the US. In these experiments, products arc evaluated and sold using various non-market valuations techniques.
Studies using the different experimental methods have also started to emerge in developing countries. However due to technological, logistical and literacy related challenges, implementing most of these methods can be challenging in lab and field experiments in developing countries. Therefore, we select four non-market valuation methods that arc
relatively easy to explain, have a dominant strategy that is not difficult to understand, that are
quick to implement, and that can be conducted one-on-one. We then compare the willingness
to pay, the efficiency of the methods, and the easiness in explaining and understanding the
methods. The paper finds consistent results across all the four methods. Consumers are willing to pay a
premium for organic and food-safcty-inspcctcd tomatoes. However, the size of the premium
differs between valuation methods where the consumers choose between alternatives, and
non-comparativc methods were the consumers indicate their willingness to pay. Due to the
easiness in conducting the experiments and efficiency of the measurements, we recommend
the use of the price list methods.
In paper 3, we investigate whether a consumer-citizen duality exists in the willingness to pay
for food safety standards in restaurants. Relying on consumer studies focusing on the buying
context to advice on public issues may underestimate the actual support for public regulations.
Studies addressing the consumer-citizen duality have mainly been in the environmental
economics, and this is one of the first to investigate a possible consumer-citizen duality in
consumer preferences for food products. We find that the duality does exist in the willingness
to pay for food safety standards in restaurants. Voting citizens exhibit higher willingness to
pay for improved food safety standards in restaurants than buying consumers.
Paper 4 is a consumer preference study involving both preference for sensory and credence
attributes. The paper mainly aims at making recommendations to producers in Africa, trying
to position value-added products for maximum revenue from Europe. Despite the significant
contribution of studies on organic, fair-trade and country-of-origin, there is still limited
understanding on attributes that are most likely to add value to products like dried fruits
exported to Europe.
To be able to advice African producers about European consumer preferences, we investigate
sensory attributes driving consumer preference and assess the willingness to pay for dried
fruits with and without credence attributes in Norway. We also use a hierarchical approach to
identify factors driving choices for specific product origins. The study finds that naturalness is
preferred over uniform taste, and fruit aroma is the most driving factor for the liking of the
products, and that extreme hardness and acidity were the most rejected attributes. On the other
hand, consumers were cither attracted by a sweet taste or by an acidic/sour taste. Consumers
were also willing to pay a premium for dried fruits with an organic and fair-trade label, but
favored fair-trade the most. We identify three consumer segments, two with distinct reasons
for preferring a country-of-origin and a third one indifferent to the origin of the dried fruits.
Description
Phd Thesis
Keywords
Eliciting consumer willingness, Food quality, Norway, Tanzania, US