Estimating Willingness to Pay for Safe Beef
Abstract
Consumers’ willingness to pay a premium price for safe and officially certified beef is analyzed in order to provide insights for producers, consumers, and the government. The analysis uses data from interviews in Bangkok, Thailand, with 620 respondents, who have experiences in buying beef. This study employs single- and double-bounded dichotomous choice contingent valuation method. The final model shows that only three variables are statistically significant in determining willingness to pay and used for the willingness to pay estimation. The weighted mean willingness to pay for safe and certified beef of Thai consumers is calculated to reflect the buying intention of both consumers with positive willingness to pay and those with true zero bids, and equal to 35.72 baht/kilogram or about 12% over the current market price of normal beef. This study’s finding could help producers decide whether to invest and raise the standard of their beef production, and in due course, improve people’s welfare in general.
References
[1] Angulo, A.M., Gil, J.M. and Tamburo, L. (2005). Food safety and consumers’ willingness to pay for labelled beef in Spain. Journal of Food Products Marketing, 11(3): 89-105. DOI: 10.1300/J038v11n03_06.
[2] Biondo, A.E. and Bonaventura, L. (2014). Agricultural resources allocation and environmental sustainability, Journal of Environmental Management and Tourism, (Volume V, Winter), 2(10): 105-113. doi:10.14505/jemt.v5.2(10).01. Available from: http://www.asers.eu/journals/jemt/past-issues
[3] Buzby, J.C., Fox, J.A., Ready, R.C. and Crutchfield, S.R. (1998). Measuring consumer benefits of food safety risk reductions. Journal of Agricultural and Applied Economics, 30(1): 69–82.
[4] Calia, P. and Strazzera, E. (2000). Bias and efficiency of single vs double bound models for contingent valuation studies: a Monte Carlo analysis. Applied Economics, 32(10): 1329-1336.
[5] Cranfield, J. (2014). Will consumers pay for voluntary testing for BSE? Double-bound CVM evidence from Canada. Working Paper Series - 13-03. Institute for the Advanced Study of Food and Agricultural Policy. Department of Food, Agricultural and Resource Economics.
[6] Enneking, U. (2004). Willingness to pay for safety improvements in the German meat sector: the case of Q&S label. European Review of Agricultural Economics, 31(2): 205-223.
[7] Goldberg, I. and Roosen, J. (2005). Measuring consumer willingness to pay for a health risk reduction of Salmonellosis and Campylobacteriosis. The 11th Congress of the EAAE (European Association of Agricultural Economists), The Future of Rural Europe in the Global Agri-Food System, Copenhagen, Denmark, August 24-27, 2005.
[8] Haab, T.C. and McConnell, K.E. (2002). Valuing environmental and natural resources: The econometrics of non-market valuation. Edward Elgar Publishing.
[9] Hadker, N., Sharma, S., David, A. and Muraleedharan, T.R. (1997). Willingness-to-pay for Borivli National Park: evidence from a contingent valuation. Ecological Economics, 21: 105-122.
[10] Halstead, J.M., Luloff, A.E. and Stevens, T.H. (1992). Protest bidders in contingent valuation. Northeastern Journal of Agriculture Resource Economics, 21: 160-169.
[11] Hanemann, W.M., Loomis, J. and Kanninen, B. (1991). Statistical efficiency of double-bounded dichotomous choice contingent valuation. American Journal of Agricultural Economics, 73(4): 1255-1263.
[12] Herriges, J.A. and Shogren, J.F. (1996). Starting point bias in dichotomous choice valuation with follow-up questioning. Journal of Environmental Economics and Management, 30: 112-131.
[13] Janssen, M. and Hamm, U. (2012). Product labelling in the market for organic food: consumer preferences and willingness-to-pay for different organic certification logos. Food Quality and Preference. 25: 9–22. DOI:10.1016/j.foodqual.2011.12.004
[14] Kimenju, S.C. and Groote, H.D. (2008). Consumer willingness to pay for genetically modified food in Kenya. Agricultural Economics, 38: 35–46.
[15] Loureiro, M.L. and Umberger, W.J. (2002). Estimating consumer willingness-to-pay for country-of-origin labels for beef products. Selected Paper 2002 American Agricultural Economics Association Annual Meetings. Long Beach, CA. July 28-31, 2002.
[16] Loureiro, M.L. and Umberger, W.J. (2003). Estimating consumer willingness to pay for country-of-origin labeling. Journal of Agricultural and Resource Economics, 28(2): 287-301.
[17] Loureiro, M.L. and Umberger, W.J. (2005). Assessing consumer preferences for country-of-origin labeling. Journal of Agricultural and Applied Economics, April, 37(1): 49-63.
[18] Loureiro, M.L. and Umberger, W.J. (2007). A choice experiment model for beef: what US consumer responses tell us about relative preference for food safety, country-of-origin labeling and traceability. Food Policy, 32: 496-514. DOI:10.1016/j.foodpol.2006.11.006
[19] McCluskey, J.J., Grimsrud, K.M., Ouchi, H. and Wahl, T.I. (2005). Bovine Spongiform Encephalopathy in Japan: consumers’ food safety perceptions and willingness to pay for tested beef. The Australian Journal of Agricultural and Resource Economics, 49: 197–209.
[20] Mitchell, R.C. and Carson, R.T. (1989). Using surveys to value public goods: the contingent valuation method. Washington, D.C., Johns Hopkins University Press.
[21] Radam, A., Abdullah, A.M., Yacob, M.R. and Ghani, S.H.A. (2010). Beef safety certification: acontingent valuation study of Malay consumers. Economic and Technology Management Review, 5: 27-39.
[22] Skuras, D. and Vakrou, A. (2002). Consumers' willingness to pay for origin labelled wine: a Greek case study. British Food Journal, 104(11): 898-912. DOI 10.1108/00070700210454622
[23] Tonsor, G.T., Schroeder, T.C. and Lusk, J.L. (2013). Consumer valuation of alternative meat origin labels. Journal of Agricultural Economics, 64(3): 676-692. DOI: 10.1111/1477-9552.12010
[24] Umberger, W.J., Boxall, P.C. and Lacy, R.C. (2009). Role of credence and health information in determining US consumers’ willingness-to-pay for grass-finished beef. The Australian Journal of Agricultural and Resource Economics, 53: 603–623. DOI: 10.1111/j.1467-8489.2009.00466.x
[25] Whitehead, J.C. (2002). Incentive incompatibility and starting-point bias in iterative valuation questions. Land Economics, 78(2): 285-97. DOI:10.2307/3147274
[2] Biondo, A.E. and Bonaventura, L. (2014). Agricultural resources allocation and environmental sustainability, Journal of Environmental Management and Tourism, (Volume V, Winter), 2(10): 105-113. doi:10.14505/jemt.v5.2(10).01. Available from: http://www.asers.eu/journals/jemt/past-issues
[3] Buzby, J.C., Fox, J.A., Ready, R.C. and Crutchfield, S.R. (1998). Measuring consumer benefits of food safety risk reductions. Journal of Agricultural and Applied Economics, 30(1): 69–82.
[4] Calia, P. and Strazzera, E. (2000). Bias and efficiency of single vs double bound models for contingent valuation studies: a Monte Carlo analysis. Applied Economics, 32(10): 1329-1336.
[5] Cranfield, J. (2014). Will consumers pay for voluntary testing for BSE? Double-bound CVM evidence from Canada. Working Paper Series - 13-03. Institute for the Advanced Study of Food and Agricultural Policy. Department of Food, Agricultural and Resource Economics.
[6] Enneking, U. (2004). Willingness to pay for safety improvements in the German meat sector: the case of Q&S label. European Review of Agricultural Economics, 31(2): 205-223.
[7] Goldberg, I. and Roosen, J. (2005). Measuring consumer willingness to pay for a health risk reduction of Salmonellosis and Campylobacteriosis. The 11th Congress of the EAAE (European Association of Agricultural Economists), The Future of Rural Europe in the Global Agri-Food System, Copenhagen, Denmark, August 24-27, 2005.
[8] Haab, T.C. and McConnell, K.E. (2002). Valuing environmental and natural resources: The econometrics of non-market valuation. Edward Elgar Publishing.
[9] Hadker, N., Sharma, S., David, A. and Muraleedharan, T.R. (1997). Willingness-to-pay for Borivli National Park: evidence from a contingent valuation. Ecological Economics, 21: 105-122.
[10] Halstead, J.M., Luloff, A.E. and Stevens, T.H. (1992). Protest bidders in contingent valuation. Northeastern Journal of Agriculture Resource Economics, 21: 160-169.
[11] Hanemann, W.M., Loomis, J. and Kanninen, B. (1991). Statistical efficiency of double-bounded dichotomous choice contingent valuation. American Journal of Agricultural Economics, 73(4): 1255-1263.
[12] Herriges, J.A. and Shogren, J.F. (1996). Starting point bias in dichotomous choice valuation with follow-up questioning. Journal of Environmental Economics and Management, 30: 112-131.
[13] Janssen, M. and Hamm, U. (2012). Product labelling in the market for organic food: consumer preferences and willingness-to-pay for different organic certification logos. Food Quality and Preference. 25: 9–22. DOI:10.1016/j.foodqual.2011.12.004
[14] Kimenju, S.C. and Groote, H.D. (2008). Consumer willingness to pay for genetically modified food in Kenya. Agricultural Economics, 38: 35–46.
[15] Loureiro, M.L. and Umberger, W.J. (2002). Estimating consumer willingness-to-pay for country-of-origin labels for beef products. Selected Paper 2002 American Agricultural Economics Association Annual Meetings. Long Beach, CA. July 28-31, 2002.
[16] Loureiro, M.L. and Umberger, W.J. (2003). Estimating consumer willingness to pay for country-of-origin labeling. Journal of Agricultural and Resource Economics, 28(2): 287-301.
[17] Loureiro, M.L. and Umberger, W.J. (2005). Assessing consumer preferences for country-of-origin labeling. Journal of Agricultural and Applied Economics, April, 37(1): 49-63.
[18] Loureiro, M.L. and Umberger, W.J. (2007). A choice experiment model for beef: what US consumer responses tell us about relative preference for food safety, country-of-origin labeling and traceability. Food Policy, 32: 496-514. DOI:10.1016/j.foodpol.2006.11.006
[19] McCluskey, J.J., Grimsrud, K.M., Ouchi, H. and Wahl, T.I. (2005). Bovine Spongiform Encephalopathy in Japan: consumers’ food safety perceptions and willingness to pay for tested beef. The Australian Journal of Agricultural and Resource Economics, 49: 197–209.
[20] Mitchell, R.C. and Carson, R.T. (1989). Using surveys to value public goods: the contingent valuation method. Washington, D.C., Johns Hopkins University Press.
[21] Radam, A., Abdullah, A.M., Yacob, M.R. and Ghani, S.H.A. (2010). Beef safety certification: acontingent valuation study of Malay consumers. Economic and Technology Management Review, 5: 27-39.
[22] Skuras, D. and Vakrou, A. (2002). Consumers' willingness to pay for origin labelled wine: a Greek case study. British Food Journal, 104(11): 898-912. DOI 10.1108/00070700210454622
[23] Tonsor, G.T., Schroeder, T.C. and Lusk, J.L. (2013). Consumer valuation of alternative meat origin labels. Journal of Agricultural Economics, 64(3): 676-692. DOI: 10.1111/1477-9552.12010
[24] Umberger, W.J., Boxall, P.C. and Lacy, R.C. (2009). Role of credence and health information in determining US consumers’ willingness-to-pay for grass-finished beef. The Australian Journal of Agricultural and Resource Economics, 53: 603–623. DOI: 10.1111/j.1467-8489.2009.00466.x
[25] Whitehead, J.C. (2002). Incentive incompatibility and starting-point bias in iterative valuation questions. Land Economics, 78(2): 285-97. DOI:10.2307/3147274
Published
2016-10-26
How to Cite
SARAITHONG, Wuthiya.
Estimating Willingness to Pay for Safe Beef.
Journal of Environmental Management and Tourism, [S.l.], v. 7, n. 1, p. 94-104, oct. 2016.
ISSN 2068-7729.
Available at: <https://journals.aserspublishing.eu/jemt/article/view/309>. Date accessed: 23 nov. 2024.
Section
Article
Keywords
beef safety; willingness to pay; contingent valuation method
Copyright© 2024 The Author(s). Published by ASERS Publishing 2024. This is an open access article distributed under the terms of CC-BY 4.0 license.