59 % of consumers are willing to pay more to get information about safety and quality of beef products. Within this group the mean WTP was 2,20 €. Consumers need for additional information: 1. The control of food of animal origin. 2. GMO in animals. 3. Country of origin. 4. Use of hormones

Latvala, Terhi

English

Organic Eprints

Food Safety Risks and Consumers’ Demand for Credence CharacteristicsTerhi LatvalaPellervo Economic Research Institute PTTNJF’s 23rd Congress ’Trends and Perspectives in Agriculture’June 26-29, 2007 CopenhagenTable of contents• Definition of Food Quality• Theoretical Framework: Economics of Information• Methodology: Contingent Valuation• Results• ConclusionsDefinition of FoodQualityFOOD SAFETY DIMENSION- heavy metals-p e s t i c i d e s-c h e m i c a lr e s i d u e s- microbiological safetySENSORY DIMENSION-f r e s n e s s-t a s t e-a p p e a r a n c e- tendernessPROCESS RELATED DIMENSION-a n i m a lw e l f a r e- environment- quality system- traceabilityNUTRITIONAL DIMENSION- vitamins-f a t- fiber, etc.USE DIMENSION- package size- food preservationPACKING DIMENSION- material- information-d e g r a d a b l eTheoretical framework: Economics of informationAkerlof (1970) model: The markets for ”lemons”: qualityuncertainty and the market mechanismIf information between market actors is asymmetric – seller hasinformation advantage over buyer – this leads to so called adverseselectionIf there is a lack of information in the market, and quality cannot be signalled to consumersonly lower quality will be availableDarby and Karni (1973): Credence quality - buyers cannot assess qualityattributes by themMethod: Contingent valuationAim of the studyAre consumers willing to pay for additional informationabout beef quality and safety?”The contingent valuation method was applied. In this methodconsumers are asked ex ante their willingness to pay (WTP) in order to obtain a perceived benefit, which is presented in a hyphotetical scenarioconcerning the good in question”A non-parametric approach based a theorem of Ayer et al. was used to estimate WTP distribution. Results: The empirical survival function0,00,10,20,30,40,50,60,70,80,91,000 , 511 , 522 , 533 , 544 , 55Bid (EUR)Pr (yes)Mean WTP   2.20 €Results- 59 % of consumers are willing to pay more to getinformation about safety and quality of beef products- Within this group the mean WTP was 2.20 EUR- Consumers need for additional information:(1) The control of food of animal origin(2) GMO in animals(3) Country of origin(4) Use of hormonesConclusionTowards more consumer oriented food chainand higher quality food markets, we need…… better information of quality attributes of food products, giving special emphasis to credence attributes… by using electronic databases and other electronicbusiness means of modern information technologyThank you for your attention!

Food safety risks and consumers' demand for credence characteristics

Abstract

Similar works

Full text

Available Versions

Organic Eprints