Consumers' Willingness to Pay for Environmental Attributes of a Cut Flower in Ethiopia: A Choice Experiment Approach

Ahmed Seid Hassen
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Ahmed Seid Hassen: Marmara University Department of Economics, İstanbul, Turkey

Yildiz Social Science Review, 2016, vol. 2, issue 1, 31-46

Abstract: The paper aims at valuing consumers' willingness to pay for environmental attributes of a cut flower using choice experiment and hence identifying the presence of a hypothetical market for environmental friendly flowers. Considering the local and global environmental impacts of floriculture, two environmental attributes of a cut flower namely, Eco-labeling (EHPEA-CP label) and Carbone footprint together with a price attribute were selected for choice experiment. Survey data from 200 randomly selected consumers were employed and two multinomial logit models and a random parameter logit model were used for estimations. The estimated results from all models reveled that respondents had the willingness to pay for both environmental attributes of a cut flower and they were willing to pay 1.98 birr and 10 birr for eco-label and carbon footprint attributes of a cut flower respectively, valuing carbon footprint more than eco-labeling. Based on the welfare estimates, consumers were willing to pay 10.47 birr for a bronze labeled and carbon neutral cut flower; 12.45 birr for a flower with silver brand and medium (neutral) carbon footprint and 24.43 birr for brand gold and carbon saving (low) flower. Thus, environmental friendly flowers mayfind a niche market in Ethiopia.

Keywords: Environmental attributes; choice experiment; willingness to pay (WTP); cut flowerJournal: Yildiz Social Science Review (search for similar items in EconPapers)
JEL-codes: F00 F30 G00 G10 K00 K20 M00 M20 O10 (search for similar items in EconPapers)
Date: 2016
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