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Factors affecting farmers’ WTP for innovative fertilizer against soil salinity

Stavroula Tsigou () and Stathis Klonaris ()
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Stavroula Tsigou: AUA

No 2018-3, Working Papers from Agricultural University of Athens, Department Of Agricultural Economics

Abstract: Salt stress noxiously shocks agricultural yield all over the world affecting production either it is for subsistence or economic outcomes. However, the market for anti-salinity products is still developing and little is known about the willingness to pay for agricultural supplies, these have been largely focused on using stated preference methods only. This paper applied both Contingent and Inferred Valuation Method for the purpose of examining the determinants of farmers’ willingness to pay for two packages of an innovative anti-salinity fertilizer, which does not yet exist in the market, in the regions of southwest Greece. With the aid of questionnaire, primary data were obtained from 150 farmers. Willingness to pay for the two packages of liquid fertilizer was measured through dichotomous choice. For the econometric analysis, interval regression model was used. The results revealed that farmers’ willingness to pay for the specific anti-salinity product is influenced by a host of factors. Especially, the regression showed that the size of cultivated land, the level of education, the knowledge scale about salinity, the package of liquid fertilizer that farmers usually buy and the consequentiality script have a positive effect on willingness to pay, whilst hypothetical bias and inferred valuation method have a negative effect. Also, we examined a methodological issue concerning the order that the package of fertilizer was appeared in the willingness to pay question which has a positive effect on willingness to pay. The implication is that taking these factors into account while large companies are looking for new and profitable products by investing for research and development enables companies’ managers to come up with projects that win acceptance from the farmers.

Keywords: salinity; willingness to pay; contingent valuation; inferred valuation; dichotomous choice (search for similar items in EconPapers)
JEL-codes: C21 M31 Q31 Q16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-dcm
Date: 2018
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