Beef Credence Attributes: Implications of Substitution Effects on Consumers’ WTP

Inês Viegas, Luis Nunes, Lívia Madureira, Magda Aguiar Fontes and José Lima Santos

Journal of Agricultural Economics, 2014, vol. 65, issue 3, 600-615

Abstract: type="main" xml:id="jage12067-abs-0001">

Consumers’ food choices are influenced by a wide variety of credence attributes, but the food industry faces problems assessing whether the price premiums that consumers are willing to pay for these attributes will be sufficient to offset higher production costs. In this context, consumers’ willingness to pay (WTP) for safer, cleaner and animal friendlier beef was investigated through a choice experiment. The relative importance of WTP for these attributes shows that consumers place the highest values on food safety, followed by animal welfare and finally environmental protection. WTP for different combinations of the three attributes cannot be obtained by independent valuation and summation due to the presence of significant substitution relationships. However, some suggestions for the relationships between these attributes can be proposed through an after-survey analytical solution. The bias involved in separately valuing closely related attributes can potentially jeopardise the success of a differentiation strategy.

Date: 2014
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