Laura Mørch Andersen

Improving Eco-labelling as an Environmental Policy Instrument: Knowledge, Trust and Organic Consumption

Abstract Eco-labels have an import role in promoting green consumption since most eco-labelled products are credence goods, implying that the valued process attributes they contain are not observable to the consumer even after purchase or consumption. Therefore, the consumers rely heavily on eco-labels as a reassurance that these attributes are actually delivered. We argue that the label will only have the desired effect if the consumers know the production standards underpinning it and have trust in the label. We test this argument using organic food as our example. The empirical results obtained on the basis of our analysis of Danish purchasing data on actual purchases combined with detailed survey data show that the higher the level of knowledge of labelling attributes and the higher the degree of trust in the label, the more likely consumers are to buy organic food.

Can increased organic consumption mitigate climate changes

Purpose – The purpose of this paper is to investigate the evidence for a positive correlation between increased consumption of organic products and potential climate change mitigation via decreased consumption of meat and it is discussed to what extent organic consumption is motivated by climate change concerns. Design/methodology/approach – A fixed effects model together with a factor analysis and ordinary least square are used to analyse household purchase data for 2,000 households in 2006-2010 combined with survey questionnaire data from 2008. Findings – A small but statistically significant correlation between increasing organic budget shares and decreasing meat budget shares is found. People include food-related behaviour such as the purchase of organic food and reduced meat consumption as ways to mitigate climate change. However, other behavioural modifications such as reduction of car usage and household heating are perceived as more important strategies. Research limitations/implications – Other f...

Digging deeper: How do different types of organic consumers influence the increasing organic market share?

The purpose of this paper is to investigate how sub markets with different degrees of maturity develop during a period of general organic growth, and how different consumer segments behave on these sub markets. The paper uses actual purchasing behaviour of six consumer segments with different attitudes towards food in general and organic production and products in particular. The data is from the Danish market for organic foods, which is one of the most mature markets in the world. The segmentation splits consumers into a positive and a non-positive half, each half consisting of three different segments. The estimations show that the development in general organic consumption varies between segments, and that their behaviour varies between sub markets. The positive half of the population has driven the overall growth in organic budget share at the Danish market over the period 2005 to 2007, while the other half have not changed their consumption significantly. The results indicate that for the most dedicated organic consumers, the organic budget share may be approaching a saturation point for some types of food, but also identifies other types of food which still have a growing organic budget share, even among the most dedicated consumers. The combination of attitudes and actual behaviour for a large number of consumers is new, and the results provide a valuable contribution to the ongoing investigation of organic consumers, and provide new nuances to the understanding of the latest organic growth.

Adoption of milk cooling technology among smallholder dairy farmers in Kenya

Factors influencing adoption of milk cooling technology were studied with data for 90 smallholder dairy farmers who were randomly selected from seven dairy cooperative societies in Kiambu County, Kenya. Logistic regression identified the age of the household head, daily household milk consumption, freehold land ownership, fodder production area, number of female calves, cooperative membership and cooperative services as significant factors influencing farmers’ willingness to invest in milk cooling technology. These findings offer an entry point for increased interventions by policy makers and various dairy sector stakeholders in promoting milk cooling technology with the aim of significantly reducing post-harvest losses and increasing the sector’s competitiveness.

Obtaining reliable Likelihood Ratio tests from simulated likelihood functions

Mixed models Models allowing for continuous heterogeneity by assuming that value of one or more parameters follow a specified distribution have become increasingly popular. This is known as ‘mixing’ parameters, and it is standard practice by researchers - and the default option in many statistical programs - to base test statistics for mixed models on simulations using asymmetric draws (e.g. Halton draws). Problem 1: Inconsistent LR tests due to asymmetric draws: This paper shows that when the estimated likelihood functions depend on standard deviations of mixed parameters this practice is very likely to cause misleading test results for the number of draws usually used today. The paper illustrates that increasing the number of draws is a very inefficient solution strategy requiring very large numbers of draws to ensure against misleading test statistics. The main conclusion of this paper is that the problem can be solved completely by using fully antithetic draws, and that using one dimensionally antithetic draws is not enough to solve the problem. Problem 2: Maintaining the correct dimensions when reducing the mixing distribution: A second point of the paper is that even when fully antithetic draws are used, models reducing the dimension of the mixing distribution must replicate the relevant dimensions of the quasi-random draws in the simulation of the restricted likelihood. Again this is not standard in research or statistical programs. The paper therefore recommends using fully antithetic draws replicating the relevant dimensions of the quasi-random draws in the simulation of the restricted likelihood and that this should become the default option in statistical programs. JEL classification: C15; C25.