ASSESSING CONSUMERS’ WILLINGNESS TO PAY FOR DIFFERENT UNITS OF ORGANIC MILK: EVIDENCE FROM MULTI-UNIT AUCTIONS

Replaced with revised version of paper 06/28/10Multi-unit Vickrey auctions, organic milk, information, Agribusiness, Consumer/Household Economics, Demand and Price Analysis, Marketing, Research Methods/ Statistical Methods, C91, D44,

Initial Endowment Effects in Multi-Unit Vickrey Auctions

We report the result of experiments designed to assess the effect of initial endowments on willingness to pay values elicited from multi-unit Vickrey auctions. Comparing bids from an “endow and upgrade” approach with the “full bidding” approach, we find that the direction of the endowment effect generally depends on the number of endowed units of the conventional product that subjects are willing to give up in exchange for units of the upgraded product. The endowment effect is “reverse” when the number of units that participants are willing to give up is lower or equal to the number of remaining endowed units. However, we generally find an endowment effect when the number of units a participant is willing to give up is higher than the number of remaining endowed units.Endowment effect, Number of units of the endowed product, Multi-unit Vickrey auctions., Agribusiness, Research Methods/ Statistical Methods, Teaching/Communication/Extension/Profession, C91, D12, D44,

On the Use of Multi-Unit Auctions in Measuring Consumers’ Willingness to Pay for Food Products

This paper proposes the use of multi-unit auctions in studying consumers’ willingness to pay (WTP) for food products in a multi-unit shopping scenario. We show how this method can overcome the limitations of single-unit experimental auctions in obtaining useful information related to WTP for not just the first unit but also subsequent units of a product, the demand curve, consumer surplus, the determinants of consumers’ WTP for each auctioned unit, and the effect of potential price discount strategies.Multi-unit auctions, Willingness to pay, demand curve, Consumer surplus, Price discounts., Agribusiness, Consumer/Household Economics, Marketing, Research Methods/ Statistical Methods, C91, D12, D44, M31,

Producer price inflation for food and drink: the role of fuel hikes and the war in Ukraine

Food supply chains were affected first by Brexit and the COVID-19 pandemic, and now by the Ukraine-Russia war. The war is disrupting international trade and raising prices for several items, such as oil and fertiliser. Cesar Revoredo-Giha, Faical Akaichi, and Montse Costa-Font analyse producer prices for food and drink and their relationship to fuel prices

How Consumers in the UK and Spain Value the Coexistence of the Claims Low Fat, Local, Organic and Low Greenhouse Gas Emissions

This study investigates the substitution and complementary effects for beef mince attributes drawing on data from large choice experiments conducted in the UK and Spain. In both countries, consumers were found to be willing to pay a price premium for the individual use of the labels “Low Fat” (UK: €3.41, Spain: €1.94), “Moderate Fat” (UK: €2.23, Spain: €1.57), “Local” (UK: €1.54, Spain: €1.61), “National” (UK: €1.33, Spain: €1.37), “Organic” (UK: €1.02, Spain: €1.09) and “Low Greenhouse Gas Emissions (GHG)” (UK: €2.05, Spain: €0.96). The results showed that consumers in both countries do not treat desirable food attributes as unrelated. In particular, consumers in Spain are willing to pay a price premium for the use of the labels “Local”, “Organic” and “Low GHG” on beef mince that is also labelled as having low or moderate fat content. By contrast, consumers in the UK were found to discount the coexistence of the labels “Low Fat” and “Organic”, “Low Fat” and “Low GHG” and “Moderate Fat” and “Low GHG”. The results, however, suggest that in the UK the demand for beef mince with moderate (low) fat content can be increased if it is also labelled as “Organic” or “Low GHG” (“Local”)

Pig farmers’ willingness to pay for management strategies to reduce aggression between pigs

When deciding whether to invest in an improvement to animal welfare, farmers must trade-off the relative costs and benefits. Despite the existence of effective solutions to many animal welfare issues, farmers’ willingness to pay for them is largely unknown. This study modelled pig farmers’ decisions to improve animal welfare using a discrete choice experiment focused on alleviating aggression between growing/finishing pigs at regrouping. Eighty-two UK and Irish pig farm owners and managers were asked to choose between hypothetical aggression control strategies described in terms of four attributes; installation cost, on-going cost, impact on skin lesions from aggression and impact on growth rate. If they did not like any of the strategies they could opt to keep their current farm practice. Systematic variations in product attributes allowed farmers’ preferences and willingness to pay to be estimated and latent class modelling accounted for heterogeneity in responses. The overall willingness to pay to reduce lesions was low at £0.06 per pig place (installation cost) and £0.01 per pig produced (running cost) for each 1% reduction in lesions. Results revealed three independent classes of farmers. Farmers in Class 1 were unlikely to regroup unfamiliar growing/finishing pigs, and thus were unwilling to adopt measures to reduce aggression at regrouping. Farmers in Classes 2 and 3 were willing to adopt measures providing certain pre-conditions were met. Farmers in Class 2 were motivated mainly by business goals, whilst farmers in Class 3 were motivated by both business and animal welfare goals, and were willing to pay the most to reduce aggression; £0.11 per pig place and £0.03 per pig produced for each 1% reduction in lesions. Farmers should not be considered a homogeneous group regarding the adoption of animal welfare innovations. Instead, campaigns should be targeted at subgroups according to their independent preferences and willingness to pay

Customisable or local? Consumers’ preferences and willingness for the characteristics of fruit and vegetable box schemes in Scotland

The demand for fruit and vegetable boxes (FVB) has increased sharply (111%) as a result of the Covid19 pandemic. Nonetheless, there is a growing fear that FVB schemes may increase food waste at home as, for example, many of the available fruit and veg boxes are not fully customisable. A choice experiment-based survey with 500 Scottish consumers was conducted to estimate consumers’ preferences and willingness to pay for strategies (e.g., completely customisable fruit and veg boxes) that can help reduce food waste that may result from the purchase and use of FVB. The preliminary results showed that customisability is a major barrier that is deterring over 76% of consumers from buying FVB. The sample consumers were found to be willing to pay a substantial price premium to improve the customisability of the FVB. Other FVB’s attributes that are frequently promoted by the sellers of FVB were found to be significantly less valued by 37% of the sampled Scottish consumers