Socially-Responsible Certification Schemes for Smallholder Coffee Farmers: Economics of Giving and Consumer Utility

Leslie J. Verteramo Chiu, Miguel I. Gómez, Harry Kaiser and Jubo Yan

No 170551, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: We study consumer preferences for socially-responsible certified coffee based on alternative ways to distribute the price premium of the product. We use Becker, DeGroot, and Marschak (BDM) auctions in an experimental setting to elicit consumer willingness to pay for two socially-responsible certified coffee systems: the existing Fair Trade and a hypothetical certification called Sustainable Trade. These certification schemes differ in the way the price premium is given to producers. In the Fair Trade certifications growers receive a cash transfer whereas in the Sustainable Trade certification a portion of the premium is allocated to a social project in the grower’s community. We segment consumers as donors and non-donors and show that individuals who donate have strong preferences for certification systems that support social projects relative no non-donors. We also find that consumer attitudes toward donating have a strong effect on their willingness to pay for certified coffee. This effect is higher for consumers that donate a higher part of their income to charities.

Keywords: Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Marketing (search for similar items in EconPapers)
Pages: 30
Date: 2014
New Economics Papers: this item is included in nep-agr, nep-exp, nep-mkt, nep-ppm and nep-upt
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170551

DOI: 10.22004/ag.econ.170551

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