Consumers’ willingness to pay for tomatoes carrying different organic labels: Evidence from auction experiments

Abstract

Purpose

The purpose of this paper is to determine consumers’ willingness to pay (WTP) for tomatoes carrying different organic labels.

Design/methodology/approach

The data were collected from 878 randomly selected consumers in Shandong Province, China, using the Becker-DeGroot-Marschak auction experiment. The authors used the multivariate probit (MVP) model to analyze the factors influencing consumer preferences.

Findings

Results indicated that consumers’ WTP for tomatoes carrying the European Union (EU) organic label was significantly higher than those carrying the Chinese organic label. However, no significant difference was found between consumers’ WTP for tomatoes carrying the EU organic label and that for tomatoes carrying both Chinese and EU labels. The results of the MVP model analysis demonstrated that the consumers with different individual characteristics had heterogeneous preferences for organic labels. Food safety consciousness and organic knowledge both had positive effects on consumers’ WTP, meanwhile, environmental awareness had no prominent effect on consumer preferences.

Originality/value

This research is of academic value and of value to policy makers and suppliers. To satisfy diverse market requirements, governments, and manufacturers should consider consumer preferences for different certification labels in strategy development.

Citation

Chen, M., Yin, S., Xu, Y. and Wang, Z. (2015), "Consumers’ willingness to pay for tomatoes carrying different organic labels: Evidence from auction experiments", British Food Journal, Vol. 117 No. 11, pp. 2814-2830. https://doi.org/10.1108/BFJ-12-2014-0415