Willingness-To-Pay for Food of the Own Region: Empirical Estimates from Hypothetical and Incentive Compatible Settings

Henrike Burchardi, Carsten Schroeder and Holger D. Thiele
Authors registered in the RePEc Author Service: Carsten Schröder

No 19365, 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The ongoing liberalisation of the European food market provides incentives to producers to seek for innovative strategies of product differentiation. One possibility to differentiate the own product from competing ones is its region-of-origin. In this paper, we investigate consumers' willingness-to-pay and underlying preferences for food of the own region. We consider fresh milk as an example. Underlying data stem from a hypothetical contingent valuation and from an incentive compatible experimental setting with real payoffs. We find that consumers perceive fresh milk from local farmers as a trustful, high quality product, and that consumers are interested in supporting local producers. Given that price premiums are small, both methods suggest a substantial demand for local products. However, compared to contingent-valuation estimates, the inclusion of real payoffs leads to a significant decrease in the willingness-to-pay stated. This decrease can mainly be assigned to "pretending altruists": free riding subjects who respond according to social norms as long as no costs are involved.

Keywords: Consumer/Household; Economics (search for similar items in EconPapers)
Pages: 32
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea05:19365

DOI: 10.22004/ag.econ.19365

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