Analyzing Determinants of Consumers' Willingness to Pay a Premium for Pesticide-free Fruit and Vegetables in Marand City

مجله اقتصاد و توسعه کشاورزی

Article 9, Volume 25, Issue 4, January 2012   

Document Type: Research Article

DOI: 10.22067/jead2.v0i0.12198

Authors

B. Hayati^* ; E. Pishbahar; M. Haghjou

Department of Agricultural Economics, Agricultural College, Tabriz University

Abstract

Abstract
The aim of this study is to investigate factors affecting consumers' willingness to pay premium prices for the pesticide-free fruit and vegetables in Marand city. A Contingent valuation survey of 394 respondents was conducted in 2010. An Ordered Logit regression model was applied to determine factors effecting consumers' willingness to pay for pesticide-free fruit and vegetables. The survey results present that only 3 percent of the respondents would not be willing to pay a premium; while about 64 percent would be willing to pay a premium between 5 and 20 percent and about 33 percent would be willing to pay more than 20 percent premium for pesticide-free fruit and vegetables. Results reveal that factors such as individual's income, environmental and health concerns, the level of safe shopping criteria, consumer's knowledge of pesticide-free fruit and vegetables' characteristics and consumer's knowledge of pesticide's side effects increase the willingness to pay a premium for pesticide-free fruit and vegetables, significantly. In addition, those who have seniors in their family would be willing to pay a significant high premium price for these products. More than 50 percent of the consumers mentioned "the nonexistence of certifications and labels", "lack of supply" as problems of purchasing pesticide-free fruit and vegetables. While 26 percent claimed high prices of these products as their most important problems in their purchasing process of pesticide-free fruit and vegetables. The study recommends encouraging farmers to produce these products, effective advertising and improving consumers’ awareness.

Keywords

Contingent valuation method; Marand; Ordered logit model; Price premium

References