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Effects of quality claims on willingness to pay for organic food

Effects of quality claims on willingness to pay for organic food PurposeClaims about environmental impact, health effects and taste of food products are restricted in the EU. The purpose of this paper is to quantify how much such claims would change the willingness to pay (WTP) for organic products in Croatia.Design/methodology/approachFor estimating the WTP under different claims the authors used an experimental auction. Participants (258) bid for real food products (organic and conventional tomatoes and apples) and are endowed with cash at a location where they usually go shopping.FindingsFor the sample the authors find that consumers are willing to pay on average a premium of 42 percent for organic apples and 59 percent for organic tomatoes. On top of that, WTP increases between 16-20 percent for environmental claims and 12 percent for health claims. Taste-related claims are not significant.Practical implicationsSellers and producers of organic food can benefit from adding claims to organic labels. To protect consumers from manipulation, regulators are well advised to be cautions when allowing claims about credence attributes of food.Originality/valueThe authors quantify the influence of claims about organic products on the WTP by using experimental auctions which are particularly suitable to investigate effects which cannot be observed on the market. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png British Food Journal Emerald Publishing

Effects of quality claims on willingness to pay for organic food

British Food Journal , Volume 118 (9): 16 – Sep 5, 2016

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0007-070X
DOI
10.1108/BFJ-11-2015-0453
Publisher site
See Article on Publisher Site

Abstract

PurposeClaims about environmental impact, health effects and taste of food products are restricted in the EU. The purpose of this paper is to quantify how much such claims would change the willingness to pay (WTP) for organic products in Croatia.Design/methodology/approachFor estimating the WTP under different claims the authors used an experimental auction. Participants (258) bid for real food products (organic and conventional tomatoes and apples) and are endowed with cash at a location where they usually go shopping.FindingsFor the sample the authors find that consumers are willing to pay on average a premium of 42 percent for organic apples and 59 percent for organic tomatoes. On top of that, WTP increases between 16-20 percent for environmental claims and 12 percent for health claims. Taste-related claims are not significant.Practical implicationsSellers and producers of organic food can benefit from adding claims to organic labels. To protect consumers from manipulation, regulators are well advised to be cautions when allowing claims about credence attributes of food.Originality/valueThe authors quantify the influence of claims about organic products on the WTP by using experimental auctions which are particularly suitable to investigate effects which cannot be observed on the market.

Journal

British Food JournalEmerald Publishing

Published: Sep 5, 2016

References