The economic information concerning consumer willingness to pay becomes particularly
\ninsightful when allowing for heterogeneity in consumer preferences. The findings presented
\nhere show that it is essential to account for preference heterogeneity, particularly
\nwhen modeling consumer demand for food with credence characteristics. The results indicate
\nthat the majority of respondents are concerned about credence characteristics related
\nto the environment, animal welfare, and antibiotics. These consumers view the certified
\nproducts as imperfect substitutes for the conventional product and have a significant
\nwillingness to pay for schemes that guarantee these attributes.
\nThe attribute-conscious group, which represents 16% of the sample, has the highest
\nwillingness to pay. However, there is a great variation of the preferences for credence
\ncertification and so the standard errors are relatively large. The second group, referred to
\nas the price-conscious group, has the lowest willingness to pay. The associated class probability
\nfor this group is 41%. The class probability for the third group, referred to as the
\nconcerned shoppers, is 43% and their preferences are situated in between the attribute and
\nthe price-conscious groups. The concerned shoppers have a positive significant willingness
\nto pay for the certification programs. However, the concerned shoppers are not willing to
\npay as high price premium as the first group and opt for the conventional product if the
\nprice is too high. Therefore, from a policy perspective, it is crucial to investigate how the
\ndegree of consumer heterogeneity affects the economic viability of a voluntary certification
\nscheme because the conventional product may be viewed as a perfect substitute by a
\nlarge population share.
\nComparing the cost estimates presented by Roller (2004) and Foster (2004) with
\nthe willingness to pay estimates seems to indicate that there is some market potential
\namong the concerned shoppers and the attribute-conscious groups for the certification
\nprograms. Therefore, if a labeling program targets the group of consumers who perceive
\nthat credence characteristics are important, it is also important to analyze how other
\nconsumer segments view the certified products, and moreover consider the welfare impact
\nof voluntary labeling policies on consumers and suppliers.<\/p>\n","protected":false},"excerpt":{"rendered":"
The economic information concerning consumer willingness to pay becomes particularly insightful when allowing for heterogeneity in consumer preferences. The findings presented here show that it is essential to account for preference heterogeneity, particularly when modeling consumer demand for food with credence characteristics. The results indicate that the majority of respondents are concerned about credence characteristics […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[8882,640,70,3694,1456,13816,5766,1672,2817,189,6784,190,5767,27280,20007,13815,2771,4151,10858,2394,14784,16262,1324,5319,21206,17743,20912,20911,4874,14923,6053,1055,5272,27281,4265],"class_list":["post-4933","post","type-post","status-publish","format-standard","hentry","category-economics","tag-al","tag-animal","tag-animal-welfare","tag-antibiotic","tag-antibiotics","tag-ass","tag-certified-products","tag-characteristics","tag-cla","tag-consumer","tag-cos","tag-cost","tag-credence-attributes","tag-environment","tag-gh","tag-insight","tag-iron","tag-labeling","tag-mark","tag-marketing","tag-ness","tag-pl","tag-pork","tag-preference","tag-prem","tag-prod","tag-some","tag-t","tag-tan","tag-the-welfare","tag-use","tag-variation","tag-voluntary-labeling","tag-welfare","tag-willingness-to-pay"],"_links":{"self":[{"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/posts\/4933","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/comments?post=4933"}],"version-history":[{"count":0,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/posts\/4933\/revisions"}],"wp:attachment":[{"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/media?parent=4933"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/categories?post=4933"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/tags?post=4933"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}