Frode Alfnes

Cognitive dissonance as a means of reducing hypothetical bias

Hypothetical bias is a persistent problem in stated preference studies. We propose and test a method for reducing hypothetical bias based on the cognitive dissonance literature in social psychology. A central element of this literature is that people prefer not to take inconsistent stands and will change their attitudes and behaviour to make them consistent. We find that participants in a stated preference willingness-to-pay study, when told that a nonhypothetical study of similar goods would follow, state significantly lower willingness to pay (WTP) than participants not so informed. In other words, participants adjust their stated WTP to avoid cognitive dissonance, that is, taking inconsistent stands on their WTP for the good being offered. Oxford University Press and Foundation for the European Review of Agricultural Economics 2010; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.

Socio-Cultural and Economic Valuation of Ecosystem Services Provided by Mediterranean Mountain Agroecosystems

The aim of this work was to elucidate the socio-cultural and economic value of a number of ecosystem services delivered by mountain agroecosystems (mostly grazing systems) in Euro-Mediterranean regions. We combined deliberative (focus groups) and survey-based stated-preference methods (choice modelling) to, first, identify the perceptions of farmers and other citizens on the most important ecosystem services and, second, to value these in economic terms according to the willingness to pay of the local (residents of the study area) and general (region where the study area is located) populations. Cultural services (particularly the aesthetic and recreational values of the landscape), supporting services (biodiversity maintenance) and some regulating services (particularly fire risk prevention) were clearly recognized by both farmers and citizens, with different degrees of importance according to their particular interests and objectives. The prevention of forest fires (≈50% of total willingness to pay) was valued by the general population as a key ecosystem service delivered by these agroecosystems, followed by the production of specific quality products linked to the territory (≈20%), biodiversity (≈20%) and cultural landscapes (≈10%). The value given by local residents to the last two ecosystem services differed considerably (≈10 and 25% for biodiversity and cultural landscape, respectively). The Total Economic Value of mountain agroecosystems was ≈120 € person−1 year−1, three times the current level of support of agro-environmental policies. By targeting and quantifying the environmental objectives of the European agri-environmental policy and compensating farmers for the public goods they deliver, the so-called “green” subsidies may become true Payments for Ecosystems Services.

The Effect of Color on Consumer WTP for Farmed Salmon

Atlantic salmon is recognized for its pink-red color. The color is due to deposition of color pigments in the muscles. Wild salmon absorb the pink-red color pigment astaxanthin from the crustaceans they eat. To impart the pink-red color in farmed salmon, synthetically produced astaxanthin is added to their feed. The more astaxanthin, the redder the flesh becomes. In conventional salmon farming, the relatively expensive astaxanthin constitutes approximately 15% of the total feed costs. In this study, we use a stated choice experiment with pictures to investigate consumer willingness to pay (WTP) for salmon with different degrees of redness. The results show that consumer WTP increases with the redness of the salmon. However, when consumers were informed about the origin of the color, the WTP for the above-normal-red salmon was reduced.

Willingness to Pay versus Expected Consumption Value in Vickrey Auctions for New Experience Goods

Over the past two decades, Vickrey auctions have been widely used to elicit willingness to pay for new food products. This article shows that in a multiperiod context, it can be optimal for consumers to bid higher than the expected consumption value for a new experience good to obtain information about how the new good fits into their preference set. The degree of uncertainty about the consumption value, the purchasing frequency, and expected future market prices affect both the expected value of the quality information and the subgame perfect bidding strategy in Vickrey auctions for new experience goods. Copyright 2007, Oxford University Press.

Consumer attitudes toward low stake risk in food markets

Consistency of quality is viewed as important for producers of consumer goods. However, there is no literature testing the importance of quality consistency on consumers’ willingness to pay for consumer goods. We use an experimental auction market to investigate how inconsistency in tenderness affects consumers’ willingness to pay for beef. We find that most consumers are risk averse with respect to sensory quality. Both the average tenderness and the variance of tenderness affected the consumers’ willingness to pay for beef. Reducing the uncertainty of the sensory quality by categorizing the beef into three tenderness classes increased the total value of the beef by 8%.

Locally produced food in restaurants: Are the customers willing to pay a premium and why?

Restaurant owners are always looking for new ways to increase profits. In this paper, we investigate the attitudes and perceptions of restaurant customers to locally produced food and their willingness to pay a premium. This study employs a field experiment conducted in a restaurant located on a Midwest US university campus. When ordinary customers entered the restaurant, we gave them the choice of two set menus that we had systematically varied with respect to price and origin. Then, while waiting for their order, we asked them to complete a short questionnaire about attitudes and perceptions. We find that a price signal must support local food labelling to obtain an increased interest from customers. When local food was marginally more expensive than other food, more customers chose local food than if it was sold at the same price.

Eliciting Consumer WTP for Food Characteristics in a Developing Context: Application of Four Valuation Methods in an African Market

We elicit willingness to pay for conventional, organic and/or food-safety-inspected tomatoes in a traditional African food market. We identify four elicitation methods that can be conducted with one respondent at a time, and use them in a field setting: the Becker–DeGroot–Marschak mechanism, multiple price lists, multiple price lists with stated quantities, and real-choice experiments. All four methods give similar results; showing that consumers are willing to pay a premium for organic and food-safety-inspected tomatoes. However, the size of the premium is significantly larger when consumers choose between alternatives than when they indicate their reservation price. The new multiple price lists with stated quantities were easy to explain in the busy market setting, gave the respondents the opportunity to determine the amount they wanted to buy, and had valuations in line with the other non-comparative valuation methods.

French Consumers’ Attitudes and Preferences toward Wild and Farmed Fish

ABSTRACT We investigated consumer preferences for wild and farmed fish in an experiment with 276 participants in France. The experiment consisted of three rounds—each round included a survey, sensory trials, and bidding. The survey results indicate consumers (1) perceive wild fish best for safety and health and farmed fish best for environmental sustainability and fish welfare; (2) rank salmon the highest on many attributes; and (3) prefer wild fish originating from the North Atlantic to farmed fish from France and northern Europe, and they rank farmed fish originating from developing countries lowest. In the sensory trials, salmon received the highest hedonic scores, followed by monkfish and cod, while pangasius scored significantly lower. Willingness to pay for salmon was almost as high as for monkfish and higher than for cod, while WTP for pangasius was substantially lower. JEL Codes: C91, D12, Q22.

Organic- and Animal Welfare-labelled Eggs: Competing for the Same Consumers?

To understand the market for sustainable foods, it is important to allow for heterogeneous preferences. However, most studies of consumer preferences for sustainable foods only investigate average consumer preferences. They do not take into account that some consumer segments attempt to purchase as much sustainable food as possible, others are almost indifferent to the notion of sustainable food, and still others consider sustainable food a complete hoax. The aim of this study is to explore the preferences for various types of premium eggs across three consumer segments. We conduct a choice experiment including 900 Norwegian consumers and perform a behavioural segmentation based on the frequency of organic food purchase. We find that the segment purchasing the most organic food is, as expected, willing to pay a significant premium for organic eggs over eggs displaying only enhanced animal welfare. However, most consumers, who only occasionally purchase organic products, are unwilling to pay more for organic eggs than for enhanced animal welfare eggs, suggesting diminishing marginal utility for additional attributes. We find that a third consumer segment attempts to avoid organic eggs, even when they cost the same as other eggs. Our findings suggest that organic products will be unsuccessful in acquiring a larger share of the market as long as most consumers are unwilling to pay a premium for organic products with all their cost increasing sustainable attributes over products that have only a single sustainable attribute, in our case enhanced animal welfare.

Exercise Effects on Fish Quality and Implications for Consumer Preferences

The consumer’s perception of appearance, taste, texture and odours of fish are fundamental aspects of fish quality. Research that specifically considers the impact of swim exercise on these quality attributes is sparse and this chapter thus discusses additionally how quality may change indirectly through exercise-inducible parameters. The literature altogether suggests that exercise proves beneficial to some exogenous characteristics like fin bites and healthy skin while several endogenous key components, such as lipid and protein content in the body, do not change significantly. This also holds for the fatty acid profile in general and the specific content of healthy omega-3 fatty acids. On the contrary, there is a noteworthy impact on numerous swim muscle parameters that leads to increases in fillet hardness. Improvements in specific quality characteristics like appearance and fillet texture characteristics have potential to be integrated in product labelling of exercised fish and this may stimulate consumer interest. In order to develop the area further future research should aim at clarifying how changeable quality parameters specifically are regulated by exercise. This would be fruitful in future advising of fish farmers on how to apply swim exercise for improving end-product quality.